• by Jack Loechner , Staff Writer @mp_research, February 24, 2005

Internet Ad Spending Leads Growth Projections for 2005

According to full-year forecasts released by TNS Media Intelligence, advertising spending is expected to increase 5.1 percent in 2005 to $150.5 billion, This increase follows the estimated growth of 10.6 percent in 2004, as the U.S. economy continues to show signs of stability.

Steven J. Fredericks, president, TNS Media Intelligence, said "É This positive growth is a strong indicator regarding the overall state of the ad industry. As the economic recovery continues, all leading categories of media will see improvement in advertising spending, with the Internet, Spanish language television and Cable Network TV showing the strongest year over year gains."

TNS Media Intelligence is predicting quarter-by-quarter growth, with the second half of the year expected to be slower due to the absence of major events, including the Olympics and the Presidential elections.

Quarterly Growth Estimates

Time Period	% Change Vs. 2004
First Half 2005	6.9%
First Quarter 2005	6.6%
Second Quarter 2005	7.1%
Second Half 2005	3.5%
Third Quarter 2005	2.0%
Fourth Quarter 2005	4.7%
Full Year 2005	5.1%

Source: TNS Media Intelligence based on TNSMI internal analyses

The forecast highlights the fact that advertisers are continuing to expand their investment in the Internet, which TNS Media Intelligence predicts will grow 11.2 percent. Spanish Language TV and Cable Network TV will also see increases, at 9.4 percent and 9.3 percent respectively, in a year in which all leading media will experience growth.

Growth Estimates For 2005 By Media

Media	% Change Vs. 2004
Internet	11.2%
Spanish Language TV	9.4%
Cable Network TV	9.3%
Outdoor	8.2%
Consumer & Sunday Magazines	6.1%
Syndication TV	5.7%
Newspapers	5.1%
Radio	5.1%
Network TV	2.9%
Business-To-Business Magazines	1.5%
Spot TV	0.6%

Source: TNS Media Intelligence Estimates Based On TNSMI Internal analyses

And, eMarketer's latest data for advertising spending predicts that, in 2005, total media ad spending will rise to $278.5 billion, with the online segment accounting for $11.5 billion in spending, or 4.1% of the total.

US Online and Total Media Ad Spending (billion dollars and online as % of total media)

Year	Online (billion $)	Total (billion $)	Online % Total
2001	$7.1	$271.3	3.1%
2002	6.0	236.9	2.5
2003	7.3	245.5	3.0
2004	9.5	264.2	3.6
2005	11.5	278.5	4.1
2006	13.4	291.0	4.6
2007	15.6	302.0	5.2
2008	17.6	307.0	5.7

Source: eMarketer, February 2005