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W A S H I N G T O N . D . C . 20301-4OCK-- 1 ’



November 30,2001,9:00
FROM: David S. C. Chu, Under Secretary of Defense (P&R)
(Signature and date)

SUBJECT: Internet Advertising

l You asked for our thoughts on why the Services have allocated only between 1 and 12
percent of their national advertising budgets on Internet advertising.
l Military recruitment advertising programs are designed to support overall recruiting
objectives, with each Service developing a media mix designed to reach its target
audience (i.e., young people ages 16 to 24). Within this media mix, Internet advertising
is integrated with the more traditional (and expensive) media (television, radio, print,
etc.). As we gain more experience with Internet advertising, the proportion spent for
that medium will grow. However, for the time being, the Services believe their
investments are about right.
l As a comparison, Internet advertising (banner ads, paid links within search engines,
etc.) comprised only 2 to 2.5 percent of total U.S. (public and private sectors)
advertising expenditures in 2000 and is projected to only grow to 4 to 6 percent of
total expenditures by 2005. The Department’s somewhat higher percentage can be
attributed to the fact that we include costs for development and maintenance of
recruiting websites in our advertising budgets. Generally, private sector Internet
advertising costs do not include development and maintenance of websites.
l Experience shows that America’s youth are increasingly turning to the Internet to learn
about military service. We believe today’s youth enjoy the ability to interact with
Service websites in a non-threatening manner -- at their own pace and in their own
homes, allowing them to delay having to talk to a recruiter until they are ready.
Additionally, recruitment leads generated as a result of our Internet presence are among
the most effective, converting to enlistment contracts at a higher rate than other leads.
Therefore, Service website addresses are featured in almost every military
advertisement, regardless of medium.