Ad biz ‘nets gain

Industry consolidating amid growth

Industry analysts forecast that advertising spending associated with “e-commerce,” or business transactions conducted over the Internet, may reach $1 billion when 1997 is tallied up.

And, with no surprise in an industry dominated by one major player in hardware (Intel) and one in software (Microsoft), the Net-based ad world is starting to consolidate as well.

Hard on the heels of the recent announcement that three key Net-ad agencies — Petry Interactive, Katz Millennium and Interactive Imaginations — would become one, 24/7 Media, comes word that the CEO of the newly merged trio says the company is looking for other Net-ad worlds to conquer.

“It’s just the first step of a consolidation play we are undertaking for the Internet ad sales business,” 24/7 Media CEO David Moore told Net-based news service News.com. “It’s a bigger critical mass of audience we can take to advertisers.”

Other targets

The “consolidation” doesn’t stop there. Focalink and ClickOver merged in December, and the largest Net-based ad auditor, Internet Profiles, gobbled up its largest competitor, NetCount, the month before that. Moore didn’t indicate which Net-ad companies he might be targeting for acquisition, but either Internet Profiles or the merged Focalink are tempting takeover targets now that they are digesting their own acquisitions.

(The matter of how advertising on the Internet is monitored is still a matter of hot debate, however; it appears Relevant Knowledge, a newish West Coast-based “metering service” with no ties to the Nielsen/Arbitron measurement universe, is winning that particular battle.)

And in a sure sign that the market is maturing, the largest Net-ad outfit around, DoubleClick, filed in December a $32 million initial public offering on the Nasdaq stock market — primarily for the dual purposes of bloating itself to a size too large to be easily digested and to have a discretionary fund on hand to buy other ad agencies.

Affirmation

Industry analyst Bill Bass of Forrester Research in Boston noted that “those people who thought Net-based ads would take off (were) right … (Revenues) have doubled every year.”

At that clip, it could become an $8 billion pie to slice up by the year 2000, according to Forrester and Relevant Knowledge estimates.

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