Nielsen Sees Moderate Q1 Online Ad Growth, Led by Search

  |  June 17, 2008   |  Comments

Combined search and display advertising grew 15 percent.

Despite flat overall U.S. advertising spending, Internet ad impressions grew almost 15 percent in the first quarter of the year when compared to 2007's first quarter, according to Nielsen Monitor-Plus.

Sponsored search link impressions in the health and telecom industries led growth in online advertising, said Nielsen. It reported search link impressions for health were up 108 percent on a quarter-to-quarter basis while telecommunications saw 80 percent growth.

Rich media showed the biggest growth in the display category, according to Nielsen. Among verticals, the researchers found that hardware and electronics advertisers both saw a 65 percent increase in display impressions, while automotive and consumer goods companies also did well, increasing 45 percent and 42 percent respectively.

Nielsen's Q1 report comes on the heels of one issued last week by TNS Media Intelligence. TNS said display ad growth, which saw double-digit growth during Q1 of 2007, slipped during Q1, growing only 8.5 percent.

Nielsen Monitor-Plus found that the usually strong financial services companies pulled back their online advertising during the quarter when compared to the same period in 2007. They decreased sponsored search investment by 15 percent and display impressions by 13 percent, Nielsen reported.

As did TNS last week, Nielsen Monitor-Plus said overall U.S. advertising during the quarter was about the same as it was during Q1 of 2007. TNS reported 0.6 percent growth while Nielsen found the growth to be 0.5 percent.

However, some traditional media -- primarily national Sunday supplements, cable TV, African-American television and network radio -- enjoyed double-digit growth, said Nielsen.

The biggest losers, when viewing all media categories, were local Sunday supplements. Nielsen said it found a 13.5 percent decline in the category.

There was increased overall ad placement in most product categories, but automotive expenditures [the biggest category in terms of total spending] came in at about 8 percent less when compared to Q1 of last year, according to Nielsen. Meanwhile, there was 16 percent growth in direct response product ads, the eighth-largest category of the 10 cited in the Nielsen report.

Procter & Gamble, the biggest ad buyer on Nielsen's list, increased its expenditure by 20 percent, noted Nielsen. But the company that boosted its ad expenditure the most compared to a year ago was PepsiCo which spent nearly 40 percent more.

Then there was Ford Motor Co. The carmaker slashed its ad budget from about $446 million in Q1 2007 to $330 million in this year's first quarter, a move that resulted in a 26 percent decrease in ad spend, the largest reported by Nielsen. AT&T, third on the big-spender list, shrank its ad budget for the quarter by 16 percent compared to Q1 of 2007, said Nielsen.

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