According to the late 2003 survey of 359 tech vendors conducted by InsightExpress, the increases to online advertising and online lead generation were slight, but encouraging. Respondents indicated that 14% of their budgets were allocated for online advertising, and 26% for online sales lead generation. These figures each represent a 1% increase over 2002, but are 2% behind the projections for 2004.
More than half (54%) of the respondents indicated that they would increase their marketing budgets in 2004, while 31% expected their allocations to remain flat. Only 7% revealed that a decrease would be imminent. Nearly one-quarter (24%) projected that they would allocate over $500,000 for their marketing activities and sales lead generation in 2004, while the majority (39%) planned on spending $50,000 to $100,000. Webcasts and online newsletter advertising were the sales lead generation methods that were expected to show the most growth in 2004 over the previous year. While more than half (55%) of the survey participants indicated that they used Webcasts in 2003, nearly three-quarters (73%) were expected to use the medium in 2004.
Internet ad revenue in Q3 2003 came in at $1.75 billion, a 5% increase over the second quarter and a 20% rise over the same period a year ago, according to estimates from PricewaterhouseCoopers (PwC). The latest PwC quarterly report, sponsored by the Interactive Advertising Bureau (IAB), found the numbers mark the highest total revenues reported since Q3 2001 ($1.77 billion). If the estimates bear out, the results would also mark the fourth consecutive quarter in which revenues have increased.
Advertising spending in the US rose by 5.7% in Q3 this year over the same time period last year. Ad spending is up in the US 3.3% during the first three quarter of this year compared to the first three quarters of last year. Spanish-language television continues to be a winner this year, reports Nielsen Media, with ad spending for the medium rising by 19.3% in the third quarter of this year over Q3 last year. Other media experiencing strong growth includes local magazines (11.9%), cable TV (8.9%) and national newspapers (8.8%).
Jupiter Research forecasts that total Internet advertising revenues in Europe will grow to 4 bil euros, or $4.8 bil, in 2008, representing 4.5% of total ad spending. Web media buys are expected to account for 75% of total online ad revenue, according to Jupiter.
When 2003 is done and gone, the online advertising industry will have seen a dramatic 14% growth rate, increasing to $6.7 billion in revenues, driven by strength in search. Online advertising revenues would exceed $15 billion by 2008, which would represent a compounded annual growth rate of 18%.
Jupiter predicted 2003 would close with the industry bringing in $6.3 billion. The Jupiter forecast calls for ad spending in 2008 to come in at $15.8 billion, and Jupiter also pegged search as the biggest driver of growth in the short term. Search will grow at a 20% compounded annual rate, with its sister service, contextual advertising, rising at an 84% compounded annual rate to $1.4 billion by 2008. Brand-oriented advertising is expected to grow at the rate of 14%.
The analyst expects online advertising revenue to grow faster than the overall advertising market — partly because the Internet will be stealing market share from traditional media outlets. By 2008, Piper Jaffray expects online advertising to account for nearly 6% of total ad spending, compared to the current rate of approximately 2%.
30.9% of PVR owners skipped or fast forwarded all commercials, and a further 21.7% indicated they did this to most commercials. This means that if 30% of homes have a PVR by the end of the decade and 50% of PVR users are skipping all or most commercials, TV advertising will become less effective for most advertisers. Saying that, the Myers Group survey did also indicate that PVR users skip commercials, but 15.3% will stop for selected ones.
Online advertising revenue in Asia-Pacific is expected to rise by a compound growth rate of about 40% in the next five years, according to research firm International Data Corp (IDC). It expects money spent on internet advertising to reach US$1.62 billion by 2007, up from $304.3 million last year.
Pop-ups’ share of the online media pie is more than double what it was a year ago. Nielsen//NetRatings found they accounted for 7.4% of all online ad impressions in Q3 2003, up from 3.0% for the same period last year.
According to a recent study from the IAB and Comscore, the average click-through rates for sponsored ads related to travel and finance were 18.3% for April and May of 2003. That compares with click-through rates of 4.3% for ordinary search results for related terms. Sponsored ads also drove more sales than did ordinary search links, according to the research. About 1.4% of the people who clicked on sponsored listings became customers of the advertisers. In comparison, about 0.6% of the people who clicked on ordinary search results made a purchase.
Online advertising formats have historically faced problems with declining response rates over time. Banner ads debuted with click-through rates above 50%, according to Nielsen/NetRatings research analyst Marc Ryan, but faded during their heyday to about 2% – a respectable performance for direct response ads. Now banners get fewer than 5 responses for every 1,000 advertisements shown, a response rate of about 0.5%.
Online advertising spending in the US totaled $1.66 billion in the second quarter of 2003, rising 1.7% from the previous quarter. The report also notes that total online ad spending in Q2 of this year rose by 13.9% from Q2 2002.