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Tipping Point on the Horizon as Internet Ad Spending Sees Double-Digit
Branding and display ads gathering momentum.
from AICPA Custom Media Solutions
Even when you exclude
paid search, online advertising revenue grew to $6.1 billion for
the first three quarters of the year -- up by 11.5 percent from
the first nine months of 2004, according to a report released last
week by TNS Media Intelligence. To put these numbers in perspective,
ad spending across all media channels grew by just 3 percent over
a comparable nine month period.
The TNS Media Intelligence
Report indicated that online growth was not just click-related as
large, blue-chip marketers reallocated budgets online, and pure-plays
increased their Web spending. "For the first time since the
dot com bust, online brands accounted for a majority of Internet
ad spending," stated the report.
Some advertising executives
agreed that there was a huge growth in display ads this year with
the biggest leaps by marketers that use the Web to manage customer
relationships. "Where customers can actually transact with
them online is where we're seeing them make the investment by leaps
Meanwhile, the Interactive
Advertising Bureau reported that all Internet ad spending, including
search, reached $8.9 billion for the first nine months of this year
-- up about 30 percent from the same time last year. Nearly 60 percent
of this volume was not search-related, consisting primarily of display
ads and sponsorships.
for Online Advertising?
While online advertising
accounts for just five percent of today’s media dollars, many
experts expect it to reach a 10 percent share by the second half
The speed of online advertising's
growth, its benefits to offline campaigns, and recent online ad
spending increases from major marketers all seem to be converging,
according to Safa Rashtchy, senior research analyst at Piper Jaffray,
whose comments appeared in a report released last week.
“We believe we
are now approaching an inflection point when online ad spending
growth could accelerate," Rashtchy wrote. "This point
is likely to be in the second half of 2006, as the full impact of
some of the recent allocation increases from major marketers becomes
evident and creates a momentum that will attract more spending by
advertisers who are on the sidelines now."
estimate is that online advertising will exceed $55 billion globally
by 2010, a 27 percent compound annual growth rate (CAGR) over 2005.
interested in enhancing the effects of both display and search advertising
by creating a coherent campaign that reaches the consumers in various
types of inventories," Rashtchy said.