Some 'Dot Coms' Hedge Super Bowl Bets

http://www4.zdnet.com:80/intweek/stories/news/0,4164,2426043,00.html

By Louis Trager, [email protected] Week

The Super Bowl is the nation’s biggest betting event. So it’s only fitting that some Internet companies are folding on big-game advertising bets, while even more “dot coms” are anteing up higher stakes than ever.

Two identified Internet companies made commitments for spots on next Sunday’s championship telecast, but then pulled out: Angeltips.com, which links entrepreneurs with early-stage individual investors, and ScreamingMedia, which distributes Web content.

Angeltips.com Chief Executive Steve Fu said his firm was approached by financial services companies in December 1999 about partnerships, but he couldn’t incorporate their offerings into his business by kickoff time. The deals still haven’t been completed, but Fu hopes to announce two or three by early February. Super Bowl time would have cost Fu $2 million of his $10 million annual ad budget. Instead, he said: “I can advertise over the whole year with a better product offering.”

The ScreamingMedia firm was tight-lipped, as was ABC. The Super Bowl broadcaster doesn’t want to scare off potential advertisers by publicizing flip-flops, which could be taken as a signal of financial problems.

Thirty-second game spots average $2.1 million, up over 30 percent from 1999, and can run as high as $3 million.

Advertising circles buzzed with reports that additional, unidentified Internet companies had reversed their field.

Because ABC singled out “dot coms” by requiring them to pay up front last fall for Super Bowl time, dropouts stood to lose part of their multimillion-dollar payments if the network couldn’t immediately recoup the money from substitute advertisers, said Bill Croasdale, senior vice president at ad buyer Western Inter-national Media. Angeltips.com negotiated its way out of the up-front requirement and hadn’t paid when it canceled, Fu said.

It’s understandable that Internet companies would call an audible. Massive holiday advertising had questionable payoffs for many. Investors are switching their criteria from a company’s quick-fix customer grabs to its profitability prospects. And some companies staggered into January short of cash or suddenly appreciating how expensive their marketing needs will be going forward. None of the game contenders comes from a megamarket or has a national following. With Internet Super Bowl advertisers up to about a dozen, being distinctive could be difficult.

Internet postage seller E-Stamp sized things up and opted for an “ambush” strategy that saw it buy cheaper pro football playoff time, duck the Super Bowl and reuse the ads on 60 Minutes, 20/20 and other national shows.

“It’s like betting a good chunk of your budget on one 30-second spot, and to us it didn’t seem like a very responsible thing to do,” said Ellen Perelman, E-Stamp’s senior marketing director.

But such qualms didn’t deter the fearless from extreme measures. Computer.com, a portal for newbies, is betting $3 million – more than half its first-round financing – on game ads.

Stationery retailer OurBeginning.com, with 1999 sales just over $1 million, took four pregame spots and a 30-second second-quarter slot for $3 million. Costs of production by a Walt Disney affiliate, plus adding hardware to handle a traffic spike, raise the tab to more than $5 million. The company’s 2000 marketing budget is $15 million.

“The Super Bowl represents not only the largest audience, but an audience that is actually looking forward to watching commercials,” said Chief Executive Mike Budowski. “So we are getting some branding impact.”

Marissa Gluck, Jupiter Communications advertising analyst, questioned the advisability of a specialty business spending so much in one shot. But she applauded Oxygen Media, a multimedia outlet for women, for launching its marketing amid “such a testosterone-filled environment.”