Credit card advertising has nearly doubled its presence on the Web this year, research firm Jupiter Media Metrix (Nasdaq: JMXI) said Monday.
“It’s understandable that the significant growth of online advertising for credit services coincides with a softening economy and the approach of the holiday shopping season,” said Charles Buchwalter, vice president of media research at the New-York based firm.
Jupiter said that ads for credit cards and related services have risen 93 percent during the past nine months, from 8 billion impressions in the first quarter to 15.4 billion in the third quarter.
Most of the increase has come since July, Jupiter found. However, the firm added that consumers are being bombarded with conflicting messages.
“Credit card companies are aggressively working to increase their customer base and encourage more spending, while credit-counseling services are simultaneously seeking to reach people tryingto get out of debt,” Buchwalter said.
Even so, Jupiter said that credit card offers are a good way for financial services firms with an array of products and services to attract newer members of the online community.
While more experienced Web surfers may be open to advanced services such as online banking, bill payment and stock brokerage services, few new online consumers are ready for those offerings yet.
“As a result, online advertising is still an effective strategy for financial services companies to grow their customer bases,” Jupiter research director James Van Dyke said.
The two dominant credit card companies, Visa and Mastercard, combined for more than 70 percent of all advertising in the consumer credit arena. Most of the rest was made up by credit counseling and reporting firms, such as Neway, ConsumerInfo.com and PrivacyGuard.
Web portals have been the biggest beneficiary of the credit advertising boom, Jupiter found. Yahoo! has delivered 5.7 billion ad impressions so far this year, iWon.com 1.2 billion and Netscape 532 million.
Glimmer of Hope
The news of growing advertising spending among consumer credit companies comes against a backdrop of otherwise bleak news for Web advertising.
In announcing its quarterly earnings last month, AOL Time Warner (NYSE: AOL) said the overall advertising market looked like it would remain weak next year. Additionally, plummeting ad sales forced dominant Web real estate company Homestore.com (Nasdaq: HOMS) to slash 700 jobs and cut its forecasts for the rest of this year and all of 2002.
Still, most analysts and insiders remain optimistic about the long-range prospects for Web advertising, which many expect to benefit from increased use of streaming media and a push to standardize how Internet traffic is measured.