• by Gavin O'Malley  @mp_gavin, February 3, 2005

Online advertising will rise 11 percent in 2005 as the total U.S. ad spend rises 5.1 percent to over $150 billion, TNS Media Intelligence/CMR reported Wednesday. The online ad growth forecast by TNS is less than last year's estimated increase of 21 percent in online ad spending and 10.6 percent in total spending; the 2004 figures, said the report, were abnormally high due to presidential elections and the summer Olympic Games.

"Our estimations for '04 and '05 are very positive overall," said Steven Fredericks, CEO of TNS Media Intelligence/CMR. "As the media pie grows, advertisers can spend less on one media outlet to spend more on another, or spend more all around, and it looks like most are doing the latter."

In fact, TNS found that traditional network television is posting far slower growth--2.9 percent growth in '05--which would indicate that as advertisers move more marketing online, they are moving away from traditional media outlets.

Fredericks said he expected TNS to release last year's actual ad spend in about a month.

"The Internet continues to have double-digit growth on a larger and larger base ... I think it's accelerating," said Fredericks. He added that TNS does not track paid search listings on Web sites, but commented: "We know that paid search is a huge piece of this pie."

The TNS report comes the same week that research firm eMarketer predicted that year-over-year growth in online spending will drop from 30.7 percent in 2004 to 21.1 percent in 2005, and should hit single digits by 2009.