First generation internet brands enjoy much higher brand awareness than newer dotcoms, despite spending less money on advertising.
In a recent CIA Medialab survey Yahoo came top in terms of name only prompted brand awareness with a spend of only £700,000 on advertising in 1999.
Amazon followed Yahoo with 28 per cent brand awareness. Although its ad spending was higher it spent still spent a relatively modest £2.6 million. Amazon was along way a head of rival bookseller BOL, which achieved nine per cent awareness with a spend of £3 million.
The CIA Medialab study suggests that BOL, and other later market entrants, have had a difficult time in matching the awareness achieved by the more established brands.
However, Egg, the Prudential's online bank, scored a higher 27 per cent awareness but that took a spend of almost £6 million. QXL, the online auction firm, spent £2.5 million and achieved only five per cent awareness.
The research strongly indicated that it was not simply a matter of being around for the longest, but about being first to market. The first generation sites, as opposed to copy cat second generation sites, are having a much easier time and requiring less advertising.
David Fletcher, head of planning at CIA Medialab, said: "Internet companies are launching almost daily at the moment. There is so much competition for consumer's attention that all dotcoms have to spend more money on advertising to be heard above the rest. It is not just a case of spending money to launch a site, money must continuously be invested in marketing to fight off competition."