How Vonage Woes Could Affect Online Advertising

10 April 2007

The biggest online ad spender of 2006 may not have reason to advertise on the Web at all in the future. Vonage plunked down more than $185 million for online ads last year, and while its monthly expenditures have lessened in recent months, the VoIP service has certainly relied on Web ads to drive customer acquisitions. A recent patent ruling against Vonage could change that.

Vonage Holdings is one of a handful of ubiquitous direct response advertisers seeking customer leads through online ads, mainly purchased through ad networks. The company topped TNS Media Intelligence's list of online ad spenders in 2006, towering over AT&T, Dell, Walt Disney and General Motors. According to Vonage's 2005 SEC filing, the firm spent over $331 million on marketing across TV, Web, print and radio in '05 and Q1 of 2006.

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