Web startups try new, cheaper ad techniques

The latest lineup of young Internet companies may be playing in an increasingly competitive field as venture-capital funding in the sector surges – but they aren’t making big marketing budgets part of their game plan.

Instead of tossing away millions of dollars on Super Bowl ads as many did at the peak of the Internet frenzy in 2000, fledgling dot-com companies nowadays are trying to catch attention through much cheaper, "viral" marketing strategies, such as blogging and word-of-mouth campaigns.

This year’s American football championship game is Sunday, but rather than advertising, the only participation by new venture-backed dot-com companies may be in watching the game.

"People are being a lot less aggressive with the money they’re spending," said Todd Dagres, co-founder of Spark Capital, a venture firm focused on media and technology investments. "It’s less about billboards and Super Bowl ads … or buying a banner on Yahoo … and more about building grassroots support to get people on to your Web site."

JANET WHITMAN
Dow Jones Newswires

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