EXCLUSIVE REPORTS
Online ad revenue staging rebound

Sheri Qualters
Journal Staff

Over the past several months, advertising spending in general and Internet advertising spending in particular has been trickling back after a two-year drought.

Alloy Marketing & Promotions LLC is just one local beneficiary of the national improvement. The Boston-based company, which is a division of New York-based Alloy Inc., hired 20 people in the past six months, bringing its head count to 100, according to senior vice president Rich Doucette. The nontraditional has become traditional said Doucette, and Alloy, which specializes in promotions through a variety of methods ranging from traditional advertising to Internet marketing to point-of-sale packaging, is well positioned.

"We've seen an uptick in spending, primarily as part of integrated programs that have other elements" besides the Internet, Doucette said. So for Alloy, a campaign that involves product packaging is also likely to include an Internet component, he explained.

During this year's first quarter, Internet ad spending spiked 12 percent to about $1.52 billion, compared with $1.36 billion during last year's first quarter, according to the New York-based advertising tracking agency TNS Media Intelligence/CMR. Advertising spending in all categories is also expected to rise this year, by about 4.3 percent to $124.7 billion, according to CMR projections released last month.

The boomerang of Internet advertising has sparked demand for copywriters with Internet or e-mail marketing experience at Boston-based marketing outsourcing company Wennik & Motta, according to co-founder Kristin Motta.

"What we are finding is that every single copywriter request we get has a web component," Motta said. "Everyone is looking for someone who can write strategic targeted e-mails that bring about results."

So far this year, the company has fielded 76 requests for copywriters, compared with 45 for its fiscal year that ended on Sept. 30, 2002. After a fairly stagnant 18 months, Motta said, companies want to "rework" their marketing materials or create new ones from scratch.

"We've increased our database by about 18 percent to try to find copywriters to fit the needs of our clients," Motta said.

Revenue is also rolling back in at Digitas Inc., a Boston-based Internet consultancy and advertising agency. For the first quarter, Digitas collected $52.3 million in fee revenue, roughly a 5 percent increase over the $49.6 million reaped during the same period last year. In a statement released with the company's earnings, chairman and CEO David Kenny noted that, while clients are still cautious when it comes to spending, many of the company's relationships are growing.

Online spending is returning to where it was three or four years ago, said Digitas' director of worldwide media, Carl Freemont. But back then, companies jumped into the medium without fully understanding how to use it effectively or measure results, he said. During the retrenchment, the advertising industry developed methods to measure effectiveness, he said.

"That's given greater confidence in the impact the medium can have through the whole marketing purchase funnel. That's why we're seeing, I believe, more of an uptick," Freemont said.

There's a lot more activity this year than last at Minelli Inc., which offers a mix of print and web-based advertising services, said Jim Coutre, director of account planning. But "revenue hasn't totally picked up," Coutre said. The 12-employee agency typically logs annual revenue in the $1 million to $1.5 million range, he said.

"People still want to spend no money and get a lot," Coutre said. "But activity and people looking to figure these things out has definitely increased (for us). There's a buzz."

© 2003 American City Business Journals Inc.