Online Ad Growth Accelerates, Jumps By A Third In Q3, Outpaces Other Media
Advertisers invested a record $3.1 billion online during the third quarter, an increase of 33.9 percent over the third quarter of 2004, according to tracking data from the Interactive Advertising Bureau and PricewaterhouseCoopers.
Importantly, that's also a 4.7 percent increase over the second quarter, indicating that online ad spending is not slowing down as many had predicted it would, but is actually accelerating. In fact, the IAB is now projecting online ad spending will surpass $12 billion for the year, a jump of more than 25 percent from 2004's $9.6 billion.
Although syndicated ad tracking firms such as Nielsen Monitor-Plus and TNS Media Intelligence have yet to release third quarter estimates, TNS has forecasted that total measured media spending will rise only 3.4 percent for full-year 2005. The fastest growing traditional medium, according to TNS, would be cable network TV, which is projected to rise 11.6 percent.
The IAB's estimates appear to be consistent with other reports showing continued strength in online advertising. At Yahoo!, for instance, third-quarter marketing services revenue grew 46 percent to $1.16 billion, from $797 million in third-quarter 2004. Ad revenues at America Online increased to about $324 million in the third quarter, marking a 28 percent leap from last year. And Google saw third-quarter revenues surge to $1.578 billion--a 96 percent leap from the third quarter of 2004.
The price of display ads at premium sites also has risen. MSN recently told The Wall Street Journal that premium 24-hour ad spots on the home page now command as much as $1 million.