For Web publishers, call it the first $1 billion holiday.
At least that's the hope among online publishers that have become accustomed to racking up strong fourth-quarter advertising sales as manufacturers and Web retailers alike try to cash in on the busiest shopping season of the year.
Last year, fourth-quarter ad sales accounted for one-third of the $1.92 billion in online advertising revenue generated during 1998, according to the Internet Advertising Bureau.
And with industry leaders expecting the Web to register more than $3 billion in ad sales in 1999, a similar sales trend would push quarterly online ad revenues past the $1 billion mark for the first time ever during the final three months of the year.
"We've sold a ton for the fourth quarter already," said Jim Kinsella, who's managing advertising sales for Microsoft's MSN Web service. "Everything is stronger this year than it has been in the past."
Indeed, publishers are beginning to report shortages of premium advertising space for the fourth quarter, said Rich Lefurgy, chairman of the Internet advertising market.
A pair of factors conspire to boost online ad spending during the final three months of the year. First, Web retailers are boosting efforts to connect with shopping-minded consumers online as they prepare for the holidays. Second, Web companies of all stripes are rushing to spend marketing money earmarked for 1999.
"Some companies face a situation of 'use it or lose it' budgeting," Lefurgy said. "And that contributes to making the market tighter."
The question now is whether Web site operators will be able to use the fourth-quarter rush to boost online ad rates that have been dropping steadily for the better part of 1999. Industry executives, for instance, said Yahoo! is trying to raise the rates for its premium space by 15 percent to 20 percent, even while more than half of the navigation hub's untargeted general ad space goes unsold. Yahoo! officials declined to comment, citing an earnings release scheduled for the first week of October.
The fourth-quarter marketing flood is not good news for everybody, though.
Ad buyers like Tim DiScipio, a partner in the Hyperconnect Interactive online ad buying firm, have to figure out new ways for their clients to get noticed amid the clutter.
"We're seeing more concern than anything else," DiScipio said. "How do you present yourself in a way that makes you stand out?"
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