Internet Advertising Research: Web's Not So Hot for Funds

Article excerpt

Mutual funds give Internet ads a cool reception

New research from mainspring Communications, Inc. makes a strong case for what it calls the Internet's "dual nature" as both an advertising medium for the creation of brand identity and a new channel for delivering branded products.

Given this paradigm, mutual fund families could be most susceptible to brand erosion by competitors based on their weak Web advertising commitments.

A new business impact study from the Cambridge, MA-based Internet advisory firm, called "The Channel is the Brand," examines the lack of Internet advertising by 12 of the top 35 mutual fund families in the United States-and how it could threaten their brands on-line. The 12 firms were randomly sampled and represent roughly 30 percent of the industry's total assets, according to the Investment Company Institute.

Among Mainspring Communication's key Web advertising findings:

Four load funds that the firm surveyed spent zero dollars on Internet advertising in 1998;

Five of the 12 surveyed fund families (load and no load) have spent less than $1 million on advertising;

Eight of the 12 funds surveyed-regardless of asset size or distribution strategy-were skeptical of the value of Internet advertising;

Only two fund families are currently actively cross-promoted by their parent companies;

12 fund parent firms fail to even mention their mutual fund affiliation in the top three levels of their Web sites;

Six of the eight funds that are advertising on the Internet spent less than 1. …