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Ad dollars to shift towards online in 2007
Fragmentation in the US advertising sector will lead to more dollars being spent on internet marketing in 2007, according to analyst TNS Media Intelligence.The group's research indicates that the amount of US ad dollars spent on internet display advertising will increase from 6.5 per cent in 2006 to 7.2 per cent this year.
This represents a 13.4 per cent change and suggests that internet advertising will grow far more sharply than any other forms of advertising over the coming 12 months. The next-fastest growing sectors are syndication TV advertising (an expected 6.6 per cent change) and outdoor advertising (5.7 per cent).
Newspaper advertising's share of the total spend is expected to shrink by 0.9 per cent – in fact, many US titles have already sought internet tie-ups as they attempt to capitalise on internet growth and stem their own decline.
Overall, TNS estimates that US ad spend this year will reach £75 billion, mirroring similarly optimistic figures predicted for the UK market.
E-commerce in general is due to receive a boost not only from internet ads but also from new technologies, better accessibility to websites and better integration with physical stores.
The take-up of broadband internet connections is also due to continue growing strongly, which in turn will mean growth in the audience for internet advertising. This factor is likely to lead to an increase in online video ads too.
TNS Media Intelligence's chief executive, Steven Fredericks, noted that sheer value for money on the internet was instrumental in attracting advertisers.
"The shift to digital media is due to more fragmentation," he said. "[Advertisers] get more effectiveness out of their ad dollars . . . It's cheaper to advertise on digital than traditional media."
He added: "Media fragmentation enables more brands with smaller media budgets to participate in the market."
The effectiveness of online advertising was demonstrated over the Christmas period in the UK. Shopping sites such as Boots and HMV performed strongly.
TNS Media Intelligence uses its own tracking technologies to collect advertising data and has a presence in 23 countries. It is part of the TNS Group, which is ranked number two in the world in terms of marketing information.
Corporate Internet news posted on 10 January 2007
