Revenue from cyberspace

U.S. Internet ad revenue jumps to record levels

The way Stuart Arthur looks at it, it only makes sense for the company he works for to advertise on the Internet. After all, Automation Services Co. is business that designs computer networks.

"Being in the IT industry, there almost is an inherent expectation that you're going to advertise online," said Arthur, the chief operating officer for the Cape Girardeau-based company. "Obviously, a lot of our customers use the Internet and therefore would be attracted to the Internet."

More and more businesses across the country are agreeing with Arthur's sentiments. The numbers back it up. U.S. Internet ad revenue jumped to a record $2.37 billion in the second quarter, surpassing the highest levels reached during the dot-com era, according to a study released last week.

Spending for online ads surged 42.7 percent from the year-ago period as advertisers devoted a larger share of their media budgets to online media companies rather than traditional media outlets, according to a study compiled by the Interactive Advertising Bureau and PricewaterhouseCoopers.

"Internet advertising is without question taking share from the other media at this time," said Greg Stuart, chief executive of IAB in a statement.

The study cited several major advertisers that increased their online budgets for the year, including Ford's Lincoln Mercury division, which is devoting 25 percent to online advertising.

Search engine-related ads, or paid search listings, remained the most popular form of advertising. They accounted for 40 percent of second-quarter ad revenue, up from an estimated 29 percent in the corresponding quarter last year.

Several auto dealers, restaurants, retail shops and stores advertise on local media Web pages as well as both area hospitals. Most, like Arthur, said they see results. Too many people use the Internet for there not to be, he said.

"It's a number that just keeps growing," he said. "Computer usage, Internet usage, the number of people who have the Internet. I just see that's always going to be a number that keeps climbing."

Local media with Web sites -- print, broadcast and radio -- say it's not necessarily taking money from their more traditional means of advertising.

"I don't look at it as a threat. I look at it as an opportunity," said Jon Rust, co-president and publisher of the Southeast Missourian, which has a Web site with many advertisers.

Rust said semissourian.com started featuring advertisements about 1997. The Web site was a natural progression in media platforms, he said, as another way for the media to get the message out. With that comes the cost involved with producing a Web site.

Rust said there are two basic models: to charge subscriptions for people to view Web site content or to have that content available through advertising.

"Since, we've had a steady and significant increase in online advertisement," he said.

Sherry Westbrook is the Internet services director for KFVS12, the Cape Girardeau CBS affiliate. The KFVS Web site does a good online business, she said. Most of its advertisers are smaller businesses, she said, but any business should consider selling online.

"It's the 24-7 of it, that's what we tell people," she said. "We look at it like this: We can get your message out while people are watching TV and the rest of the time we can get it out while they're on the computer."

Meg Davis, a marketing specialist with River Radio in Cape Girardeau, said she understands why businesses are increasingly looking for a stronger presence on the Web.

"I sit in front of my computer half the day, doing research, putting together proposals, all kinds of things," she said. "So I certainly see these ads. If it's something I'm interested in, I'll check it out."

smoyers@semissourian.com

335-6611, extension 137