Survey: Online Spending Surges 14%

Online ad spending in the second quarter soared by 13.8 percent from the first three months of the year, according to a new study conducted by Deutsche Bank in conjunction with MediaPost. Pricing also increased, with the cost of premium inventory rising 6.6 percent, run of network inventory increasing 3.6 percent, and paid search edging up 1.3 percent quarter-over-quarter.

For the report, 39 media executives were questioned earlier this month about their clients' experiences with Internet advertising in the first quarter, and expectations for this quarter. Collectively, respondents spent $152 million on Internet advertising last quarter. This survey, conducted online by InsightExpress using members of the MediaPost advisory panel, marks the seventh in an ongoing series of quarterly studies of media professionals by MediaPost and Deutsche Bank.

About 78 percent of media executives who responded to the current survey reported that their clients spent more on Internet advertising last quarter than in the first, with 15 percent seeing increases of more than 30 percent. About 18 percent reported no change in spending, while 3 percent said spending declined.



Almost half--47 percent--of respondents said the cost-per-thousand impressions for premium inventory were more last quarter than in the first three months of the year, with 36 percent reporting increases greater than 10 percent. Forty-seven percent of respondents also said that pricing for run-of-network inventory had increased, with about 9 percent reporting increases of more than 10 percent.

About 44 percent of respondents saw an increase in the cost of purchasing keywords, with 11 percent reporting spikes of more than 10 percent.

Large portals proved more popular with media buyers in the second quarter than the first, with executives allocating 32 percent of their online budgets to Yahoo (15 percent), MSN (10 percent), and AOL (7 percent); in the first quarter, portals garnered just 22 percent of budget. Niche sites like iVillage, Marketwatch, and CNET captured 31 percent--also up from the first quarter's 23 percent. Ad networks such as and ValueClick drew 11 percent of display spending. Google dominated the paid search market, garnering 65 percent of cost-per-click spending; Yahoo accounted for 25 percent, and MSN took in 8 percent.

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