• by Jack Loechner , Staff Writer, March 8, 2006

According to the recent Outsell annual Ad Spending Study to analyze differences across advertisers and the markets they target: B2B, B2C, and Healthcare, Yahoo! and MSN face extended minority status in the ratings of advertisers if they don't change the perception that ads on Google are more effective.

Shared on a complimentary basis, the study is based on advertisers controlling an estimated $2.4 billion in advertising with a confidence level of 95±3%, concludes that leading B2B trade information providers will generate 35% to 50% of their revenue online within two to three years. Advertisers are hooked on the results they're getting from targeted and measurable online marketing methods.

Chuck Richard, Vice President & Lead Analyst Outsell, Inc., suggests that print, TV/Radio, and events will lose share in the marketing mix, but they don't come close to being blown away. Marketers will continue to find strong value in the power of a mix of methods for reaching and influencing their prospects. He further opines that the 80% penetration of online marketing methods, already higher than widely reported, will quickly approach 100%.

Key findings include:

• Winner: Search engine ad spending grows 26% in 2006.
• Losers: Print spending grows 3.3%, TV/Radio 2.4%, both losing share.
• Online is now used by 80% of advertisers, a massive adoption rate not broadly acknowledged. We expect more than 90% adoption by 2008.
• Google is rated more effective than Yahoo! & MSN in keyword ads; and than Yahoo! in contextual ads.
• Total online marketing spending will grow 19% in 2006, 8 times TV/Radio and 6 times print. We estimate online growth at 20% CAGR extending into 2008.
• Even more dramatic, the median online percent of ad mix will grow 50%.
• Lead-generation using free content such as white papers will grow 19%, driven by high conversion and users opting in.
• Keyword ads are rated much more effective than contextual placement; we expect contextual / behavioral / search combo to rise.
• Companies' own sites get 33% of their online budget, double that spent on search engines. Better natural search results from site optimization is driving this and will fuel growth in Web marketing services.
• Blog and wireless marketing spending are still slivers at less than 2% of online budget and are poised to grow 43% and 19%, respectively.
• Old media's far from dead: trade magazines, events, and direct mail marketing are rated the top 3 most effective tactics for both branding and lead generation.
• Avid Google Advertisers Have Smallest Budgets; Use Most Online, Least Print

• Those rating Google extremely effective have 20% smaller total advertising budgets than those rating Yahoo! And MSN extremely effective.
• Those rating Google extremely effective allocate more of their advertising spending online, less to print and TV/Radio. MSN users allocate the most to print, the least to online.

• Online Spending Will Grow 19%, Take More Share from Print, TV & Radio

For more information about the study, please visit here.