TNS Ups Internet Ad Spend Forecast

  |  June 13, 2006   |  Comments

Ad spending on the Internet was upgraded while the overall spend expectations came down slightly in a full-year forecast.

U.S. Internet ad spending, excluding search, is expected to increase by 13 percent in 2006, according to a revised full-year forecast released today by TNS Media Intelligence. Earlier estimates had pegged 2006 growth at just 9.1 percent.

The forecast sees growth on the Internet channel moving faster than any other. An earlier forecast placed Hispanic TV just ahead of the Internet. Growth in that channel is now expected to reach 12.9 percent, which is up from an earlier approximation of 10.4 percent growth. While these areas are showing growth, print media including newspaper and B2B magazines are expected to hold at about 19 percent of total ad volume this year.

"I think increased use of the Internet is taking away dollars from traditional media, notably areas like B2B magazines and local newspapers," Steven Fredericks, president and CEO of TNS Media Intelligence told ClickZ News. "It's not surprising to us. We see an increase [on the Internet] that continues to grow into double digits."

Growth on the Internet channel reached 19.4 percent in the first quarter.

Display advertising on the Internet currently accounts for 6.7 percent of total ad spend. That's $10 billion out of the total $150 billion that's spent on advertising. While TNS doesn't track search, Fredericks estimates that search accounts for about 50 percent of total Internet advertising when considering IAB figures.

"If you add search, total Internet advertising is probably 12 to 13 percent [of the total ad spend]," he said.

The Internet continues to be a driver of the increasing ad spend. Spending on advertising overall is expected to amount to 4.9 percent growth for the year, short of the 5.4 percent estimated earlier this year.

"If overall growth for all media is going to be 4.9 percent, and Internet growth is at 13 percent, it's growing faster than the general advertising index. It's going to be borrowing from other media at this point," said Fredericks. "That's causing a shift in how other media is presented, and how to best engage the consumer. Techniques are starting to evolve that lead to more effective use of advertising on the Internet."

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