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NEWS: Online Ad Sales Reach Record High in Q1. 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 the mainstream." 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. Click here for recent issues of CPA Marketing Insider |
