Two Baltimore advertising firms are taking a leap into the world of new media by establishing new agencies devoted to the World Wide Web and other innovative advertising.
Eisner & Associates Inc. said yesterday that it had recently set up Lighthouse Studios as a separate venture from the 75-employee downtown ad agency that represents clients such as Black and Decker Corp. and Helix Health System. And an executive of Richardson Myers & Donofrio said that firm's interactive advertising department was being reorganized into a new firm called Carton Donofrio Interactive.
Both hope to carve out a share of an Internet advertising market that is still only a tiny slice of what Americans spend advertising -- less than 1 percent last year. But the value of Web advertising is expected to rise to $110 million this year from about $60 million in 1995, and could reach almost $1.9 billion by 2000, according to Simba Information Inc.
"In five minutes, new media is old news," said Byron Tucker, president of Lighthouse Studios and a former co-creative director at Eisner. "We call it alternative media, stuff that isn't the typical communications."
For Lighthouse, that means a range from now-commonplace tasks such as designing World Wide Web pages to developing interactive media like CD-ROMs and disk-based advertising to more adventurous projects such as developing television programs that highlight a client's products -- for example, a home improvement show on behalf of a client that makes woodworking tools, Tucker said.
"Eventually, this is going to become an advertising business," Tucker said. "Eventually, the Internet will be a mass-media business and take its place right along TV and radio."
But an array of obstacles stands between today's mini-media presence and the Net's hoped-for mass media future. For now, Internet advertising is very expensive and doesn't deliver mass markets, and security concerns cloud the short-term outlook for direct Web selling.
Tucker said his new firm hopes to reach about $1.5 million in billings in its first year. Sean Carton, director of interactive advertising at Richardson Myers and a principal in the Carton Donofrio Interactive, said that number is aggressive -- his 2-year-old division, recognized by other advertising figures as the local leader in new media work, will bill about $1 million this year.
Both figures are a small fraction of what the new firms' mother-ship agencies bill out. Eisner put its annual billings at $96 million, which puts it in a close race for second among Baltimore agencies with Gray Kirk/VanSant and well behind local leader W. B. Doner & Co. Inc.
But one measure of the confusion within the advertising business about the future of the Web is that some competitors think that Lighthouse is getting into the business too soon to make money, while others maintain that it's already too late for a new entrant to stake a serious claim to leadership in a sub-industry now dominated by California shops such as Organic Online Inc. and CKS Group.
"We use outside contractors to help us construct Web sites for clients when the need arises," said Gray Kirk President Roger L. Gray, who has no immediate plans to create a separate `f Internet-advertising unit.
"I don't have the demand or the resources to put up against it to do it right," Gray said.
"In a way, it's almost too late for someone to get in," Carton said. Leaders like Organic Online, he said, are "big and very, very good."
Organic Online Chief Executive Jonathan Nelson agreed with Tucker, however, that no more than a handful of players are serious competitors at his firm's level of the business.
Nelson said Web advertising is different than traditional media because it is more driven by content than by brand image and slogans.
"When you have unlimited Web space on your server, you're expected to say a lot more than three words" like "Coke is it," he said.
The typical client, for now, is often one that otherwise advertises in special-interest media and is attracted to the sheer quantity of information that it can share online. Anita G. Mooy, marketing communications manager for Black and Decker Corp.'s DeWalt Industrial Tools division, said her company is considering proposals from Lighthouse and other agencies for interactive advertising.
Pub Date: 8/07/96