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NEWS: Online Ad Sales Reach Record High in Q1.
More than two years of strong quarterly growth according to PwC
and Internet Advertising Bureau.
Custom Media Solutions
According to the latest "Internet Advertising
Revenue Report" from the Interactive Advertising Bureau, conducted
by PricewaterhouseCoopers, Internet advertising totaled over $2.8
billion for the first quarter of 2005, an increase of 26-percent
over the first quarter of 2004. "When you look at the past
two years, first quarter online ad spending was the lowest of the
four quarters," said David Hallerman, Senior Analyst at eMarketer,
another widely followed marketing and forecasting firm. "So
there's little doubt that when the final numbers come in for 2005,
it will be a record year."
Online ad spending for the quarter increased 26
percent over the year-ago quarter and 4.3 percent over the fourth
quarter of 2004, the researchers said. "Marketers continue
to recognize the relevance of interactive as an integral part of
their marketing mix," said Greg Stuart, CEO of the IAB in a
recent news release. "The continued and steady growth we have
experienced over the past two years is a clear indication that this
medium delivers results and is fast becoming accepted as part of
Tom Hyland of PwC concurred. "While the online
audience gets bigger and broader, the TV audience continues to fragment,
even as the cost of advertising spots rises," he said. "Add
the growth of broadband in the home, which enables advertisers a
platform to deliver rich media, and brand advertisers have a new
mass audience to target."
eMarketer is projecting that online advertising
will rise nearly 34-percent in 2005 to $12.9 billion, outstripping
the 32.5-percent growth of 2004.
Last week Goldman
Sachs raised its forecast for 2005 online ad spending, predicting
a 28 percent expansion to $12.3 billion, or 4.4 percent of total
U.S. ad spending. Forrester
Research also revised its numbers upward to $14.7 billion. Keep
in mind that Forrester's estimate includes commercial e-mail spending
along with the media buys for online advertising.
While the consensus of industry watchers credit
paid search with the boon for online advertising, that only explains
40 percent of the dollars spent on the Web. As discussed in earlier
editions of CPA Marketing Insider, display advertising and sponsorships
are also surfing the rising tide of digital advertising and will
account for approximately 25-percent to 30-percent of online advertising
spent this year. Also discussed in earlier issues, Fortune 1000
companies are using online advertising for both branding and direct
response purposes. On average, they are committing 12- to 15-percent
of their marketing budgets to some form of online advertising.
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