Internet Ad Spending Sees Double-Digit Growth

Revenues from online advertising, excluding search, grew to $6.1 billion for the first three quarters of the year--up by 11.5 percent from the first nine months of 2004, according to a report released Wednesday by TNS Media Intelligence. Overall, ad spending during the first three quarters increased by just 3 percent, to $104.1 billion.

Online growth was driven by two major factors, stated the report: large, blue-chip marketers reallocated budgets online, and pure-plays increased their Web spending. "For the first time since the dot com bust, online brands accounted for a majority of Internet ad spending," stated the report.

Some advertising executives agreed that there was a huge growth in display ads this year--although not necessarily because of a surge in spending by dot-coms and blue-chip companies. Louis Jones, executive vice president, managing director for MPG's Media Contacts, said that online spending has increased across the board, with the biggest leaps by marketers that use the Web to manage customer relationships. "Where customers can actually transact with them online, is where we're seeing them make the investment by leaps and bounds," Jones said.

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Financial companies like Fidelity and Barclays, for instance--which offer consumers the ability to monitor accounts online--have upped their ad spending significantly this year, Jones said.

Other industry reports this year also show an increase in online ad revenues. The Interactive Advertising Bureau reported that all Internet ad spending, including search, reached $8.9 billion for the first nine months of this year--up from about 6.8 billion for the same time last year. Search ads accounted for about 40 percent of the online ad spend last year and the first half of this year, according to the IAB.

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