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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Hank who wrote (3812)	3/1/1998 12:28:00 PM
From: Lazlo Pierce	Respond to of 18691

It seems that the Internet music retailers are starting to spend big bucks on advertising on network TV. Hmmm this'll help the bottom line over the next few years NOT! ********************** Feb. 26 - When it comes to advertising, the strategy for companies like Amazon.com and Web music retailer CDnow used to be nothing but the 'Net. After all, if customers aren't on the Internet, they can't buy tapes and compact discs from the retailers' Web sites. ÿ ÿ ÿ ÿBUT THAT THINKING has changed. Music lovers watched the Grammys last night and the Grammys influence music sales. So it makes sense for music retailers to advertise on television like they did on Wednesday - even at rates insiders say can reach $800,000 a minute. But what if you've never made a penny and, at most, only about a third of the population can get to your store? ÿ ÿ ÿ ÿThat's the story of CDnow. The Internet-based retailer was a multi-million dollar advertiser on the Grammys. The ads appeared just two weeks after the company raised $65 million in an IPO.** Analysts say it was ad money well spent. "They are locked in a battle with Music Boulevard which is owned by N2K. I think CDnow wants to raise up its brand profile and that's why it took such an aggressive stance," said analyst Bill Burnham of Piper Jaffray. ÿ ÿ ÿ ÿBook retailer Amazon.com advertises all over the Web, but a national television campaign? Advertising guru Donny Deutsch says the new ads are an indication that Internet businesses are ready for prime time. "Starting off the bat with this - high-profile broadcast television - is once again a real sign that these people are here to stay in a very serious way," said Deutsch, CEO, Deutsch Inc. ÿ ÿ ÿ ÿMuch of the Web-related advertising on TV has been for online services, which offer Internet access and content bundled together. But advertising content or commerce alone is relatively new. Paying the huge costs of traditional media advertising for companies like CDnow and Amazon.com is also a sea change. ÿ ÿ ÿ ÿWall Street seems unconcerned though; Amazon.com is still trading near its all-time high. ÿ ÿ ÿ ÿTV viewers better get used to the new ads. "It's really raising the stakes in Internet commerce by advertising like this - you are really forcing everyone else to step up to the plate," said Burnham.>> Dave