The result? In 2006, total spending on advertising was driven by increased spending on Internet, mobile and alternative out-of-home, with a soupcon of political campaign spending thrown in for good measure, finds a new study by Veronis Suhler Stevenson Communications, a private equity firm that invests capital funds in the media, communications, information and education industries in North America and Europe.

Total spending on advertising grew 5.7% in '06, to $209.74 billion.

Overall ad spend rose at a compound annual growth rate (CAGR) of 4.5% from 2001 to 2006, propelled by many of the same drivers such as the migration to Internet search and online video advertising, as well as strong gains in cable, satellite & Regional Bell Operating Company (RBOC) television advertising, out-of-home media and video game advertising.

Other key findings:

• National advertising outperformed local advertising in '06--rising 8.2% compared with 3.5% for local advertising, primarily driven by the alternative media market that caters mainly to national brand marketers.
• If pure-play online advertising were combined with advertising on traditional media online platforms, overall Internet advertising would surpass newspapers as the largest advertising medium by '11--reaching $61.98 billion, and posting a 21.2% CAGR during the 2006-2011 period.
• Spending on advertising is expected to grow 4.2% in '07, to $218.45 billion, driven by the alternative media segments. Spending is expected to grow at a CAGR of 5.2% from '06 to '11, reaching $270.69 billion. Alternative advertising's market share will rise to 27.7% by '11, up from the 12.7% share in '06 and 5.4% share in '01.
• Traditional advertising--including print media such as newspapers, magazines and Yellow Pages; broadcast and cable television; broadcast radio; and traditional out-of-home--inched up only 2.4% in '06 to $183.21 billion. Growth was hindered by declines in many print advertising categories, a weak domestic auto market, and decelerating growth in the cable, satellite & RBOC television services segments.
• Alternative advertising--including pure-play online and mobile advertising, Web sites of traditional media, satellite radio, in-video game advertising, and alternative out-of-home media--soared 36.6% in '06, to $26.53 billion. Advertising dollars are migrating at an accelerated pace to media that offer stronger return-on-investment metrics and are not impacted by ad-skipping technology.