Heinz, be glad you are not subjected to the barrage of .com ads in radio and tv here in the states - they are almost constant now and are worse than political ads in campaign years.
<<FEATURE-Online companies go all-out to advertise offline
By Jim Welte
SAN FRANCISCO, Nov 23 (Reuters) - There's no escaping dot.com ads this fourth quarter, with Internet companies viewing the holiday season as a make-or-break period and advertising wherever they can to grab the attention of consumers and set themselves apart....
``People are looking at the fourth quarter as definitely a make-or-break situation,' said Annie Williams, senior vice president of marketing for CNET, which spent $25 million on marketing in the third quarter and will spend $100 million on print, outdoor and broadcast ads over the next 18 months. ``It's like a political campaign, and there's no way to make it unless you distinguish yourself from everyone else out there.'
Start-ups looking to spend a large chunk of their venture capital funding have largely chosen to go for broke with national television campaigns. They and older dot.coms have also complemented those ventures with selective print, outdoor and radio efforts.
According to Competitive Media Reporting, which tracks ad spending, Internet companies spent $90.9 million on radio advertising in the first half of 1999, compared with $26.8 million spent in the same period last year. The Radio Advertising Bureau conducted a study earlier this year on offline dot.com advertising in the top 13 U.S. markets and found that radio garnered 41.3 percent of the money spent by dot.coms on ads in traditional media....>>
biz.yahoo.com
The cash burn rate for these companies is amazing and most with either be bankrupt by this time next year or will need to come to the financing trough again to survive.
For example, garden.com (not to pick on them, there are dozens others just like them) lost over $21M last year and has around $43M cash and had ads everywhere right now. They estimate they have enough cash to last until only June, 2000 in their SEC filings. Their revenues were a stellar $1.4M which consisted of $257,000 of ad revenues (most likely from other .coms) and $252,000 in interest income generated from the IPO proceeds.
These companies exist SOLELY to generate IPO proceeds to the fee whores and venture capitalists.
What's next? I can see PickTheLintOutofYourBellyButton.com in our future. IPO priced at $15, opens at $30 with a market cap of $500M. Full radio and tv ad campaign to market the revolutionary range of lint removal devices. Sheesh...
Regards, Ken. |
