Internet Maintains Growth While Total Ad Spend Declines

  |  September 11, 2007   |  Comments

Web ad spending grew 17.7 percent in Q2, while the total ad spend shrank for the second consecutive quarter.

Total advertising expenditures suffered a 0.3 percent loss in Q2 2007, their second consecutive quarterly decline, according to TNS Media Intelligence. While Internet advertising gained by 17.7 percent, the trend indicated an overall reduction in media budgets that could over time threaten online spending.

Internet spending grew 17.7 percent to $5.52 billion over the first six months of the year. Other categories experiencing growth included consumer magazines (6.9 percent), outdoor (3.6 percent), and cable TV (2.8 percent).

"Still the Internet continues to take in a larger share of the pie, even as the total pie is shrinking," said Jon Swallen, SVP of research at TNS Media Intelligence. "The Internet's slice of that pie is getting larger... primarily at the expense of newspapers, and to a lesser extent television."

Categories experiencing declines included newspaper (5.7 percent), radio (2.7 percent), and broadcast TV (3.6 percent).

"The newspaper industry's own tracking shows that the rate of growth in Web advertising on newspaper sites continues to get larger, but getting larger at a smaller rate," said Swallen. "Incremental revenue from Web advertising is not offsetting and making up for lost revenue in the print edition." For every dollar brought in for a print ad, the counterpart Web ad costs between 20 and 30 cents, he said, so newspapers are still short 70 to 80 cents on the dollar for every ad placement that migrates from one channel to the other.

Meanwhile, the decline in overall ad spending may be a reflection of general economic weakness, as indicated by slower growth in retail sales, rising unemployment and flagging consumer confidence, among other factors.

Swallen said the top 50 advertisers, which account for one third of the ad spend, are tightening their budgets. "The cutback in advertising is being led from the top of the market by big blue chip companies, manifesting itself in fewer brands being supported with ad money. It indicates a retrenchment," he said.

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!

ABOUT THE AUTHOR

Enid Burns

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...