E commerce ad spending is up
Amazon.com and Priceline.com were among the top five e-commerce companies in terms of spending during the first quarter to drive customers to their sites and build their brands, according to a new data from the eCommerce Almanac, published by San Diego, Cal.-based Intermarket Group. Average spending on sales and marketing by the top five, which also includes e-Trade, Charles Schwab and Ameritrade, was $29.8 million for the quarter. The median first quarter sales and marketing expenditure among all the more than 80 e-commerce companies tracked, a group that includes both b to b firms and e-retailers such as EddieBauer.com and Toysrus.com was $21 million for an annual run rate of $84 million compared to $34 million for all of 1999. Although the dot.com ad wars pushed total spending past last yearâs levels, the report noted, the share of top-line revenue allocated to sales and marketing actually dropped during the quarter by 36% from last year.
Offline advertising accounts for a substantial share of sales and marketing spending at the companies tracked, according to the report. A full 75% of them use television ads, followed by 68% who advertise on radio and 53% who use consumer periodicals. The median customer acquisition cost among all companies was 78%; though the largest proportion of companies invest between $10 and $49 to acquire each new customer. One in twelve invests $500 or more.
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