Surveys Show Online Ads Growing Faster This Year
October 10th, 2007 Posted in NewsOnline ads may be the biggest threat for print ads this year. This was put into light by a survey conducted by the Interactive Advertising Bureau or IAB and the PricewaterhouseCoopers or PWC, two of today’s respected marketing research firms.
The survey reveals an impressive 26.4 percent growth of online ad revenue on the first half of this year at about 10 billion dollars over the same period last year. Ad spending trends, on the other hand, were traced by the research organizations, Nielsen and TNS Media Intelligence, both of which noted a slower growth rate than what the IAB and PWC reported, referring to ad revenues of last year’s first half to reach only a 37-percentage hold on revenues.
There are varying interpretations regarding this contradicting survey results from all four media research firms. On one side, there are some members of the investment community believing that such growth is alarming. On the other side, there are the experts, the IAB in particular, who reads the numbers as a sign of maturity.
Some investors think of the growth as something to worry about and experts gives the reason why: growth rates are getting harder to maintain. This, as online ad revenue continues to grow statistically according to the actual dollars spent. Both of the years 2006 and 2007 have seen the downward “pull” of the ad revenue “push”, taking marketers to a dive of 2.1 billion dollars into the medium on the first two quarters of the previous year.
This year’s survey shows no difference, say experts. The distribution of revenues across display, channels, and search has not changed so far. While search spending has reached 41 percent of revenues, 40 percent was the achievement of the first half of last year. In other words, the search leaped to 4.1 billion dollars.
Statistics show an increase of 2.4 billion dollars on display advertising, which is 31 percent of the entire ad expenditures in the first six months of 2006. The year 2007 saw a 1 point difference at 32 percent.
Further, classified ads surge to 100 million to 1.7 million dollars, thus, leaving the first and second quarters of the year with only 17 percent—a low result when placed alongside the same period of the previous year at 20 percent. It also seems that not even the regulatory changes and mortgage crisis could keep lead generation from growing from 7 to 8 percent of all internet ad revenue.
The IAB/PWC survey also revealed ad revenues were now, more than ever, centered on top ad sellers. As for the top ad revenue-earning sites, they got the 70 percent chunk of the total ad spend, a one percent difference from last year’s 71 percent over the same period. The top 50, on the other hands, manage to account for 91 percent of all reported online ad revenues.
Throughout the surveys, consumer advertisers dominated 54 percent of the overall ad revenues. Pegged at 5.4 billion dollars, that percentage is considered higher compared to its 3.9 billion worth of spending in 2006. Retail led the rankings among consumer ads at 47 percent of all ad revenues followed by the automotive, travel, and entertainment industries at 21, 13, and 9 percent respectively.
