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Research Center >> E-Newsletters Online
Advertising Surge Continues Now that the media environment has cooled off from its torrid pace of the past several years, Web advertising may finally get more respect. Whether you’re partial to search, display, sponsorship, podcasts or Webcasts, marketers are allocating an increasing share of their budgets — about 15 percent on average — to some form of digital media because it’s fast to produce, easy to measure — and it gets results. But, don’t take it from us. Survey: Online Spending Surges 14 percent Online advertising spending in the second quarter soared by 13.8 percent from the first three months of the year, according to a new study conducted by Deutsche Bank in conjunction with MediaPost. Pricing also increased, with the cost of premium inventory rising 6.6 percent. For the report, 39 media executives were questioned earlier this month about their clients' experiences with Internet advertising in the first quarter, and expectations for this quarter. This survey, conducted online by InsightExpress using members of the MediaPost advisory panel, marks the seventh in an ongoing series of quarterly studies of media professionals by MediaPost and Deutsche Bank. About 78 percent of media executives who responded to the current survey — collectively they spent over $150 million on Internet advertising last quarter — reported that their clients spent more on Internet advertising last quarter than in the first, with 15 percent seeing increases of more than 30 percent. About 18 percent reported no change in spending, while three percent said spending declined. Almost half of the respondents (47%) said the cost-per-thousand impressions for premium inventory were more last quarter than in the first three months of the year, with 36 percent reporting increases greater than 10 percent. Forty-seven percent of respondents also said that pricing for run-of-network inventory had increased, with about nine percent reporting increases of more than 10 percent. Ad Guru Predicts 25 percent Surge in Internet Ad Spending Despite Lackluster Overall Ad Environment Widely watched ad industry forecaster, Robert Coen of Universal McCann, revised his barometer of U.S. Internet ad spending upward late last month, but was bearish on ad spending overall. Coen, senior vice president and director of forecasting for Universal McCann, now predicts that Internet spending — excluding search — will surge to over $9.7 billion this year, marking a 25 percent increase from 2005. In the first quarter alone, online ad spending grew more than 19 percent from last year, according to Coen. Last December, he projected that online ad spending for the year would total $8.7 billion, representing a growth rate of just 10 percent. While the Interactive Advertising Bureau pegs search as representing about 41 percent of online ad revenues, Coen routinely excludes search from his calculations of online ad dollars. Why? He likens search advertising to the slotting fees that retailers pay to stores to get premium shelf space for their products. Some other forecasters have predicted that online ad spending, including search, will total around $20 billion this year. PQ Media Tuesday pegged this year's total online ad spend at $19.96 billion—a 26 percent surge from 2005; TNS Media Intelligence president-CEO Steven Fredericks also recently estimated that overall Web ad spending will amount to around $20 billion. eMarketer forecasts a slightly more conservative $16.7 billion online ad spend for this year. Overall, Coen predicted ad spending would rise to $286.405 billion, a 5.6 percent increase from last year; last December, he forecast 5.8 percent growth. The more pessimistic outlook stems at least partly from slower-than-expected local growth in the first quarter; newspaper retail ads were down one percent the first three months of the year, while spot radio was down two percent and Yellow Pages were "flat to down," according to Coen's report. Given the softer local ad market, Coen lowered his local spending forecast 3.1 percent (to $101 billion) from the previously projected four percent. PwC: Net Ads to Take Lead in Global Growth Not only are people spending more time on the Internet and with new wireless technologies — they'll be turning to these newer platforms for entertainment and media, too. That's the finding of PricewaterhouseCoopers (PwC) in its "Global Entertainment and Media Outlook: 2006–2010." PwC predicted the Internet will be the fastest growing advertising sector globally, with an 18.1 percent compounded annual growth rate to hit $51.6 billion by 2010. Net advertising will make up 10 percent of all ad revenues by 2010, up from less than three percent in 2002. Plus, global spending on entertainment and media via online and wireless channels will go from $19 billion in 2005 to $67 billion by 2010. PwC predicts broadband will go from 187 million households in '05 to 433 million by '10. "Virtually every segment of the entertainment and media industry is shifting from physical distribution to digital distribution of content," said PwC's Wayne Jackson. "As this shift continues, we see more revenue opportunities for entertainment and media.” Forecast: Online to Reach 9 Percent Share of Ad Spend in 2011 Online advertising is expected grow to represent nine percent of overall advertising spending by 2011 according to the latest JupiterResearch forecast, "U.S. Online Advertising Forecast, 2006 to 2011." The researchers pegged online advertising to reach $25.9 billion in revenues by 2011, rising at a compound annual growth rate (CAGR) of 11 percent over the next five years. Display advertising online, which is forecast to reach $9.2 billion in 2011, will be marked by dramatic growth in certain of its subsets. Rich media spending is expected to climb at a 21 percent compounded annual growth rate, while video expenditures are forecast to increase at a 27 percent CAGR through 2011. Broadband adoption and traditional advertisers' fondness for the formats are the trend's drivers, according to Jupiter analysts. Survey: U.S. Marketers Shift Toward Trackable Marketing and Media Efforts Seventy-nine percent of marketing leaders report that they are reducing mass-marketing budgets in favor of more targeted efforts. This was a key finding from Epsilon's Business-to-Business Marketing survey with GfK NOP. The results were released in June by Epsilon, a provider of multi-channel marketing services, technologies and database solutions, yesterday at the 2006 DM Days New York Conference & Expo. GfK NOP, a worldwide market research organization, conducted the Epsilon Interactive survey from March 28 to April 4 among a qualified sample of 175 U.S.-based business-to-business marketing executives to understand their organizations’ 2006 marketing plans, budget allocations, measurement practices and interest in new technologies and new marketing media/channels. The survey also revealed that although traditional marketing channels —TV, radio and print — continue to command the largest share of budgets, the largest spending change among respondents is occurring in trackable media categories. Today more than half of respondents’ budgets go to trackable media, including channels like direct mail, e-mail, telemarketing and search, and 79 percent of respondents report that they are decreasing mass marketing budgets in favor of more targeted efforts. Meanwhile, more than a third, 34 percent, were concerned that their organizations were not properly structured to execute a coordinated, integrated, cross-channel marketing campaign. Of those organizations that do practice cross-channel, integrated marketing, 62 percent, a majority, reported double-digit lifts in marketing performance, with nearly one-in-five reporting a lift of greater than 15 percent. The typical mean reported lift was 11 percent. |
