Thursday, July 06, 2006
eMarketer.com - US Internet Ad Spend to Climb by 25%...Or Is That 33%?:
"When looking at ad spending figures, always ask what is being counted
By David Hallerman – Senior Analyst
When Universal McCann announced its latest 2006 ad spending projections at the end of June, two revisions from the firm's December 2005 estimates stood out. While US total media spending in 2005 increased by only 2.8% (in contrast to the earlier 4.6% figure), Internet ad spending in 2006 is now expected to soar by 25% (in contrast to the previous 10% prediction).
With those growth rates moving in two different directions, the picture is clear: more and more ad dollars are moving from traditional media to the Internet. Take national cable TV. In Universal's initial projection for this year, the expectation was for 7.0% growth; now that's at a more realistic 4.5% gain. Similarly, local radio ad spending growth estimates fell from 4.0% to no gain.
There is nothing wrong with amending ad spending projections. All researchers revise as new information becomes available. What's striking about Universal's 25% growth rate for the online space is how it does not include paid search ad spending—the giant that contributes a 40%-plus slice to the entire Internet pie.
Paid search is growing even faster than most other online ad vehicles. When you look at how Google's US advertising revenue (minus traffic acquisition costs, to eliminate double-counting) in Q1 2006 grew by 84% compared to last year's Q1, it appears that even Universal's revised 25% gain might be conservative. And Yahoo!, the bellwether of Internet advertising with its combined search and branding strengths, grew revenues by 35% in Q1.
Since the entire Internet ad space truly includes paid search ad spending along with other online advertising formats such as display ads, video and classifieds, eMarketer predicts a 33.2% jump in US online ad spending this year, to a total of $16.7 billion.
For even more useful information on ad spending, consult the new eMarketer report Local Online Advertising: Measuring the Potential..."
"When looking at ad spending figures, always ask what is being counted
By David Hallerman – Senior Analyst
When Universal McCann announced its latest 2006 ad spending projections at the end of June, two revisions from the firm's December 2005 estimates stood out. While US total media spending in 2005 increased by only 2.8% (in contrast to the earlier 4.6% figure), Internet ad spending in 2006 is now expected to soar by 25% (in contrast to the previous 10% prediction).
With those growth rates moving in two different directions, the picture is clear: more and more ad dollars are moving from traditional media to the Internet. Take national cable TV. In Universal's initial projection for this year, the expectation was for 7.0% growth; now that's at a more realistic 4.5% gain. Similarly, local radio ad spending growth estimates fell from 4.0% to no gain.
There is nothing wrong with amending ad spending projections. All researchers revise as new information becomes available. What's striking about Universal's 25% growth rate for the online space is how it does not include paid search ad spending—the giant that contributes a 40%-plus slice to the entire Internet pie.
Paid search is growing even faster than most other online ad vehicles. When you look at how Google's US advertising revenue (minus traffic acquisition costs, to eliminate double-counting) in Q1 2006 grew by 84% compared to last year's Q1, it appears that even Universal's revised 25% gain might be conservative. And Yahoo!, the bellwether of Internet advertising with its combined search and branding strengths, grew revenues by 35% in Q1.
Since the entire Internet ad space truly includes paid search ad spending along with other online advertising formats such as display ads, video and classifieds, eMarketer predicts a 33.2% jump in US online ad spending this year, to a total of $16.7 billion.
For even more useful information on ad spending, consult the new eMarketer report Local Online Advertising: Measuring the Potential..."
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