TNS: Internet Ad Spend Will Grow 7.6 Percent

Spending on Web ads, other than paid search listings, is expected to grow 7.6 percent, while ad spending across all media likely will rise 3.4 percent this year, according to TNS Media Intelligence. But, cautioned TNS CEO and president Steve Fredericks, the medium is entering a phase in which year-on-year comparisons are becoming more difficult.

"I don't think we've seen such buzz surrounding a media industry since its first heyday in 2000," Fredericks said at a presentation in New York City. "There is considerable press attention not only on who is moving ad dollars to the Internet and what percentage the Internet is of an overall brand marketing budget--but also many opinions on how the industry is and will be tracked in the future.

In the aftermath of the dot-com bust, measured Internet ad spending bottomed out in 2002 at $5.2 billion dollars. However, in 2003, expenditures jumped 17.6 percent, and last year we saw an increase of 21.4 percent over the prior year. During the last two full years, the net increase has been more than $2.2 billion dollars."



He also pointed out that the recent growth in Internet ad spending is coming from traditional advertisers at the expense of dot-com brands. Over the past four years, these traditional brands have grown their total online ad spending by 50 percent, from $2.8 billion to $4.2 billion. On a share basis, these brands now account for 57 percent of total ad spending on the Internet, versus 48 percent in 2001. As a disclaimer, TNS representatives noted that Internet ad projections don't include paid search advertising, which comprises nearly one-half of all online ad spending.

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