Central Penn Business Journal (Harrisburg), July 18

Internet advertising revenue grows 18% in first quarter

By Jim T. Ryan

Internet advertising across the U.S. saw its second-best quarter earlier in the year, with revenues hitting $5.8 billion.

That's an 18.2 percent increase from the first quarter of 2007, according to the Interactive Advertising Bureau, a New York City-based trade group that's tracked Internet advertising since 1996.

The various forms of online marketing and advertising have seen steep increases in total revenue each year since 2004, according to the bureau. Companies purchasing ads have started to shift their focus from mass-marketing techniques to targeted-advertising methods online.

The record numbers and the success of Internet marketing are mainly due to the medium's efficiency, local advertising, technology and media companies said.

"The Internet reaches people by engaging the people that are specifically looking for your type of service or company," said Joe Sharp, president and chief executive officer of Sharp Innovations Inc.

The Lancaster-based online-marketing company has seen an increase in the use of new forms of advertising and marketing by more companies looking to capture the power of the Internet to reach specific audiences, Sharp said. Many times, those methods don't look like your traditional banner advertisement, but they can be just as effective, he said.

Search-engine optimization and marketing are examples. By structuring Web pages better, search engines are more likely to find and pick up the pages most relevant to a search.

That's important because more than 55 percent of Internet users find information on local businesses using search engines, Sharp said.

But there are many options for online advertising. Whereas traditional advertising might be constrained by geography, page space, postage rates and other factors, online advertising is as versatile as the Internet itself.

Even interactive e-mails are considered online ads, said Gary Bellanca, president of LMI Advertising, based in Manheim Township, Lancaster County. E-mail ads might be the distant cousin of direct mailings, but they tell advertisers more than a postcard in the snail-mail ever could, he said.

"Online advertising gives us a lot of avenues to understand if it's really working," he said.

Because e-mail is interactive, advertisers will know if it reached its destination, if it was opened, how much time passed before it was opened and whether the recipient found the information useful enough to respond or seek more information.

Local companies have spent much more on online marketing and advertising over the last several years.

The Harrisburg, Lancaster, Lebanon and York markets collectively are projected to spend $75 million for online advertising in 2008, according to Borrell Associates Inc., a Virginia-based media research firm that tracks local and national advertising spending. That's nearly 88 percent more than was spent in 2007 by companies in Central Pennsylvania.

"This doesn't even take into account the other $168 million in online advertising which will be directed to your market from national advertisers (in 2008)," said Deanna DeYoung, Borrell's sales director.

That's more than the total revenue for local and national advertising in 2006, she said.

These are big numbers and could make some people drool thinking about the potential cash flow, but be careful that the dollar signs are not just in your eyes.

Older mediums are still king in the advertising world, Bellanca said. Television, radio, newspapers and magazines are still effective for the needs of many companies and offer the prospect of reaching a mass audience.

"People want things done faster and faster and faster," he said. "Sometimes I wonder what we're losing by doing that. Sometimes, it would be nice to slow down to contemplate how clients are spending money."

The Internet is winning over more people as time passes, said Joe Tertel, an e-marketing consultant with Swatara Township, Dauphin County-based JPL Productions Inc., a media and technology company.

"Companies are not increasing their budget overall, but they're changing their percentages," he said. "You used to be able to do a TV or print ad campaign to be successful, but now they have to be online, too."

The future of advertising could lie across the billions of cables in a dimly lit room being dreamt up by Google employees over a bag of chips - after all, Google has succeeded with online-advertising plots. But much of today's advertising world still relies on a comprehensive strategy that brings together old and new media for the best benefits of the client, experts said.

Just one piece of parting advice from them: Don't be silent.

"If you're not communicating, you're not going to get what you're looking for," Bellanca said. "It's not going to come magically."

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