To help understand this growth, many analysts look to the amount of online advertising that comes from traditional offline brands. Considering that Internet advertising expenditures in 1999 were a mere five percent of total ad expenditures for all media, there's a lot of room for the industry to grow. Most analysts are banking on traditional companies warming up to the benefits of the Internet and devoting more of their ad budgets to their online campaigns.

While traditional companies are paying more attention to online advertising, an analysis of the Top 200 advertisers in Q2 2000 reveals that dot coms¹ advertising online account for both the largest number of companies and the biggest share of impressions. In fact, dot com advertisers outnumber traditional advertisers two to one.

As the number of dot coms continues to increase, so do their number of ad impressions. The past year has seen the percentage of dot coms in the Top 200 advertiser rankings increase from 54 percent of the companies in July 1999 to 68 percent in June 2000. Not only is the number of companies increasing, but these companies are also committing a greater percentage of the impressions scheduled by the Top 200 Online Advertisers. In July of 1999, 108 dot coms in the Top 200 rankings committed 64 percent of the Top 200's impressions, while in June 2000, 138 dot coms committed 75 percent of the impressions.

Also highly dominated by dot com companies are both the Retail and Business-to Business industries with 74 and 61 percent of the Top 200 Online Advertisers coming from dot coms.

While dot coms are leading the biggest industries, traditional companies heavily populate many industries. The Hardware & Electronics and Consumer Goods industries are populated primarily by traditional companies who represent 97 percent of their advertisers.

If every company in the Top 200 Online Advertiser rankings committed the same amount of impressions, one could anticipate that the percent of companies represented by dot coms would equal the percent of impressions by dot coms. Therefore the percent of companies could be used to determine expected ad spending by dot coms. Comparing actual spend to expected spend helps to shed light on which industries are being dominated by dot com ad spending.

Interestingly, while dot coms might not account for the majority of companies in the top rankings by industry, in some instances the few companies that are in the Top 200 dominate ad spending.

While only 32 of the Top 200 software advertisers are dot coms, they account for 86 percent of all impressions of the Top 200 software advertisers. The same story applies for the travel industry where 48 of the Top 200 travel companies account for 80 percent of all Top 200 travel advertising impressions.

Despite the dominance of dot coms, traditional advertisers have managed to stake a claim in some industries. No doubt as traditional advertisers become more comfortable with online advertising they will begin to spend more of their budgets on the Internet, but until that day comes, the dot coms are in the driver's seat.