Tax Sites Spend Big Online, See Early Traffic Boost

by , Feb 15, 2006, 6:01 AM
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Traffic to Web sites that help consumers prepare for tax season has increased by 26 percent since last year, Nielsen//NetRatings reported on Tuesday. The boost follows a 371 percent increase in online ad spending by tax sites, according to Nielsen//NetRatings' AdRelevance unit.

The disparity between ad spending and usership as percentage increases represents an immature ad market--at least for financial services sites--rather than a poor return on advertising investments, according to Ken Cassar, chief analyst at Nielsen//NetRatings.

"The reason why that [the disparity] is possible is that advertising is in a less mature state than usage by consumers," said Cassar. "My instinct is that the increase in their spends was well worth it."

Tax sites drew 14.1 million unique visitors in the first week of February--or 11 percent of all Internet users--which already beats last year's tax season peak of 12.5 million during April crunch-time by 13 percent. The early spike represents a desire by consumers online to tackle their taxes early, according to NetRatings Senior Analyst Heather Dougherty.

"Financial publications and service providers should take note and optimize their marketing efforts by targeting this group of early-birds on the Web," Dougherty said in statement.

HRBlock.com led the fastest-growing sites, with an 84 percent jump from 1.3 million to 2.3 million unique visitors year-over-year. Taxcut.com followed, with an 81 percent increase from 519,000 to 937,000 unique visitors. IRS.com ranked third--with 41 percent growth, spurred by 362,000 visits growing to 512,000.

AdRelevance estimates that financial services/tax preparation sites increased CPM-based advertising online by 342 percent year-over-year from $521,200 to $2,304,700. That is the result of a 371 percent increase in display ad impressions, from over 147 million to over 695 million.

H&R Block increased its ad spend 364 percent from $496,200 to $2,302,700 year-over-year, AdRelevance estimates, resulting from a 391 percent increase in display ad impressions--from more than 141 million to more than 694 million.

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