Over the last several months, many of us on the Web have pulled over to the side of the road to show our respects to the long line of dotcom funeral processions passing by. High traffic Web sites have caught their breath as they've watch their ad revenues sink to the floor. As winter set in, some sites saw their ad revenues drop to as low as 10% of their summer-month revenues. Yet, a study by AdRelevance that was released on November 22, 2000 stated that ''Overall, the number of new companies advertising online has increased by 157 percent over the past 10 months.''

The same study said, ''Traditional, non-Internet firms advertise at a higher rate on the Net than their dotcom counterparts. Traditional companies accounted for almost 50 percent of the top 100 new advertisers in October, up from 41 percent in January of this year.'' http://www.adrelevance.com/ So we are seeing a shift in advertisers. Traditional, real-world firms are starting to see the benefits of Web marketing while dotcoms, which have centered their entire business on the Web, are tightening their belts to remain afloat.

So what happened to the dotcoms?

Are Internet-based enterprises a dying breed? Don't nail that coffin shut yet. The pulse is still beating. In order to save the dotcoms, we need to understand what caused the illness. The problem has been that Internet companies have tried to defy gravity. They thought they could take off at the speed of light, throw a lot of money around and grow at an escalated pace - something that is rarely done in the real world. Due to media hype and speculation, investors fueled this frenzy until reality set in and everything came crashing down.

One of the biggest wastes of investment dollars for dotcoms has been television advertising. Active Research (http://www.activeresearch.com) reported the results of a survey it conducted with 1,734 respondents on December 21, 1999: ''Despite the slew of dotcom advertisements on US television, a quarter of US adults could not remember a single one. Even the advertisement for Amazon, which was remembered most by consumers, was only recalled by 1 in 10 people.

The holiday season advertisements for Yahoo and Etoys were remembered by three percent of those surveyed and one percent or less of respondents recalled all other advertisements. Television advertisements should usually be recalled by 15 to 30 percent of people to be considered effective.

So What Works?

From the StatMarket survey cited above, the best sources of traffic would include:

- Word of mouth - where people tell others and the URL's are directly typed into the locator window of the browser. - Links from other sites that could be contained in articles and reference lists. - Banner, button, and sponsorship ads. - Email links, viral marketing methods. - Email sponsorships and email newsletter ads.

Where will dotcoms generate their revenues in the future?

It is the opinion of this author, that dotcoms will see a reduction in revenues generated from banner ads, and an increase in revenues generated from sponsorships, in-text links, text ads, and email sponsorships.

According to CNET, ''Email newsletters with specialized content and small circulation figures are the new targets of the major advertising networks. Companies such as DoubleClick, CMGI Europe and 24/7 have all recently launched products that allow these tailored electronic publications to sell advertising space. ''

''It costs on average $93 per thousand emails sent to sponsor an email newsletter, according to recent reports from Forrester Research, an Internet research firm based in Cambridge, Mass. This figure is commonly referred to in the industry as cost per thousand (CPM). The average click through rate, or number of times that someone clicked on the ad, is about 2.5 percent. In-house email promotion averages a click-through rate of 10 percent. That beats banner advertising click through rates by more than ninefold'' (''Newsletter Authors Reap Banner Profits'' by Stefanie Olsen, CNET News.com, March 30, 2000)

Email has the ability to build a sense of community and brand loyalty. This is very important for small companies with small marketing budgets.

Another method of advertising that is showing promising results is strategically placed text ads. Over the last year or so, IdeaMarketers.com has been running a series of advertisements on its site called ''Expert Tidbits.'' (http://www.ideamarketers.com/services/marketing.cfm ) These are informative tips or tricks approximately 50 words in length, which link to an appropriate page on the advertiser's site. These ads are content-targeted, meaning that an ad for a business-related service would appear on business-related articles and the Business channel at IdeaMarketers. Or an ad for a home/family site would appear on articles related to home and family or parenting or on the Home channel at IdeaMarketers.

IdeaMarketers is seeing click-through rates as high as 10 percent for some tips, but the average click-through rate has been 2%, much higher than the 0.36 percent click-through rate generated by banner ads as reported by Nielsen Netratings in March 2000 (''Web Ads Gaining Momentum $1.9 billion was spent in 1999, an 85.9% increase from 1998'', Carol Emert, San Francisco Chronicle)

In summary, Web advertising is not dead, it just needs to be well targeted, monitored and tracked. Hype must be replaced with good old-fashioned, logical business methods. The recent shakeout was inevitable. The sky is not falling; e-commerce isn't dead. It's just adjusting back to reality. It may very well be the tortoises that win this race and not the hares.

About the Author
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Marnie L. Pehrson helps Web-based businesses build loyal traffic and convert that traffic into profits. She is a writer, internet revenue & marketing consultant and content provider. Visit http://www.pwgroup.com or email marnie@pwgroup.com for details.