Dotcom cos receive ad deluge

Dotcom cos receive ad deluge
AGENCIES

SAN FRANCISCO, JAN 23: The deluge of dot-com advertising isn't over just yet, thanks to marketing ambitions in the hot Internet sector known as "business to business."

Agencies were ready for a lull following the unprecedented ad-spending blitz by their Internet clients in the fourth quarter of 1999. Final numbers for the quarter aren't in yet, but based on dot-coms' spending for October -- a hefty $460 million, according to Competitive Media Reporting -- their advertising outlays for the final three months of the year could well exceed $1 billion.

Now, in a bit of a surprise, a new flock of richly funded Web start-ups has put out feelers to ad agencies. If the advances turn into a second windfall in ad spending, it would go a long way toward making up the drop-off in business that ad shops have been anticipating.

The new dot-coms aren't peddling pet food or fancy jewelry; in fact, they aren't selling anything to most of the people watching TV or reading magazines. Rather, they are trying to sellbusiness goods and services to corporate prospects, a task once reserved for the pages of trade journals and other financial media.

Nonetheless, some of the "b-to-b" start-ups plan to match the eye-popping spending levels of their consumer counterparts. AllBusiness.com www.allbusiness.com), a San Francisco Web site providing services for small businesses, has hired Sausalito, Calif., agency Butler, Shine & Stern as part of a $40 million branding campaign including television, radio and online ads. Scott Waltz, chief marketing officer, estimates most b-to-b start-ups' plans call for them to spend 40% to 70% of their total funding on marketing efforts.

"In a perfect world, you could wait to optimize your investment over time," Waltz says. "But the reality is there's such a huge level of urgency to get out there and win the land grab that we need to accelerate our reach. Traditional business-to-business vehicles just take too long."

Business-to-business clients present some unique advertising challenges.Unlike, say, a Web site that sells books, many b-to-b companies have a hard time explaining what they do in a language most people will understand. Take Personify Inc., which recently hired a newly formed Internet-strategies group at True North Communications' Foote, Cone & Belding agency to help it better define itself. On its Web site (www.personify.com), the San Francisco company says it is a "leader in eMarketing software" providing "actionable insight" to its clients.

Executives at Personify, which is planning an initial public offering of stock for the near future, say they are hunting for ways to more clearly describe what their company does. After all, a successful IPO needs excited investors, but it's not easy when investors -- or even customers -- can't understand what they are supposed to get excited about. Already, Personify faces a slew of rivals that claim to be doing the same thing Personify does.

"We're always struggling to communicate what this thing is," concedes Joseph Rodriguez, nowPersonify's director of marketing communications. "If you talk too high-level, people can't wrap their minds around it." Because the right corporate image these days can mean billions of dollars in stock-market value, b-to-b start-ups feel they can't afford not to advertise. "It's become such a competition for the attention of the press and Wall Street that everyone's realized the importance of communication," says Jane Gardner, head of the Foote Cone Internet unit.