• by Masha Geller , July 7, 2003

eMarketer's Advertising Spending report, scheduled for release later this week, spells good news for the online advertising industry. From this year forward, the trend in US online advertising spending is up, according to eMarketer research, rising to $6.3 billion in 2003 from last year's $6.0 billion figure, or a 4.8% growth rate. By 2006, ad spending will reach $8.1 billion-returning to the levels of the Internet boom days.

"Even though projecting these various numbers merely creates moving targets," eMarketer says, "they all point upward in 2003 and the three years ahead."

Total US advertising spending will reach $248.25 billion this year, according to eMarketer. That represents a 4.9% gain over last year's $236.75 billion figure, benchmarked against Universal McCann's spending research through 2002. As with Universal's estimates, eMarketer includes the following media, both national and local, in its US ad spending projections: television, radio, newspapers, magazines, Internet, direct mail, yellow pages, and outdoor.

The most recent figures from TNS Media Intelligence/CMR, for Q1 2003, show a total growth rate of 4.9%. Several media are doing substantially better than that average, however. Ad spending on cable TV jumped by 18.0%, reaching more than $2.5 billion in the first quarter. Consumer magazines are also participating in an ad recovery, increasing by 12.0% to more than $3.7 billion. And Internet advertising posted a 12.2% gain, with spending at more than $1.5 billion.

One of the sections of the report focuses on the "alphabet soup of CPM (cost per thousand) and CPC (cost per click) pricing," and looks at which model works best depends on the advertiser's objectives and the publisher's needs, as well as both sides' tolerance levels for absorbing financial risk. According to the data, while 45% of US online ad revenues in 2002 came from CPM pricing, about the same as the previous two years, a shift to paying only for what you get means that performance deals garnered 21% of revenues, up from 12% in 2001.

The report is the third and final part of eMarketer's reports focusing on advertising and marketing. The other two reports are: Online Advertising Essentials, which focuses on what marketers need to know about online audiences, dayparts, branding, direct response, context, advertisers and publishers; and Online Advertising Tactics: trends, stats and best practices for using banners, rich media, search, sponsorships, email, classifieds and more.