CMR: Web Ad Revenues Down 10 Percent From Year-Ago

While recent reports suggest that there’s cause for optimism over online media spending this year, new figures from Competitive Media Reporting find a sharp decline in Internet spending from year-ago levels — casting doubt on any near-term recovery.

According to the New York-based company’s CMRi Internet group, Web ad spending for the first half of 2001 totaled $1.5 billion, down from $1.65 reported a year earlier.

That’s slightly better than during the second half of 2000, when the industry brought in about $1.3 billion, although the year’s later quarters are typically slower.

“Although we saw a gradual increase for online spending in the last quarter of 2000, the economic environment did not exclude this medium from the drastic hit we’ve seen across the entire marketplace throughout the course of 2001,” said CMR president and chief executive David Peeler.

The news also means that online advertising budgets are being cut faster than offline ones, on average. Last week, CMR reported that traditional media spending during the first half of the year was off 5.9 percent from the year-ago period.

Among offline media, only spot television, Sunday and national newspapers, and national spot and network radio saw a greater spending decline than did online media, according to CMR’s statistics. Additionally, outdoor, cable television, syndication-national and Sunday magazines all grew between 1.5 percent and 5.1 percent.

As a result of the findings, CMR’s expectations for the immediate future are grim.

“As budget planning for 2002 gets under way, companies still recovering from their losses will be reluctant to channel their dollars towards major ad campaigns,” Peeler said. “With this mindset, we do not expect a jump-start in spending to kick in by first quarter 2002, as many have hoped.”

The news follows on the heels of a similar report by Merrill Lynch — which conducts its own studies — stating that the online ad market would still return to growth next year, but at a slower pace than previously expected. (Evincing the differences and difficulties in accurately tracking online spending, Merrill said it predicts that the industry will rake in about $6.5 billion in 2001, 7 percent down from last year.)

Among online publishers, Yahoo again led the pack, according to CMR’s numbers. The Sunnyvale, Calif.-based portal saw a total of $197.3 million of ad revenue, up about 1.69 percent from a year ago. (Merrill, among several other prominent industry watchers, point to AOL Time Warner as the space’s leader, although CMR figures showed the New York-based media conglomerate took in only about $174.3 million in interactive revenues.)

General Motors again placed first among the Internet’s big spenders, committing a total of $25.4 million to media for all of its brands — although the figure is almost half of what it spent a year ago.

eBay closely followed GM’s spending, dropping $24.4 million on ads for its site and its Half.com subsidiary, while Amazon.com, Classmates Online and JP Morgan Chase rounded out the top buyers, with $16.2 million, $15.1 million and $14.9 million spent online, according to CMR.

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