Fewer Companies Spending on Net Ads

A study by the Association of National Advertisers (ANA) released at the @d:tech Conference predicts a strong year for Internet advertising, despite fewer companies spending fewer dollars on the medium.

According to the survey, the percentage of companies advertising online has decreased to 61 percent from 68 percent last year, and advertisers are spending less (an average of $649,000 compared to $714,000 last year).

Despite these numbers, the study’s author remains upbeat.

“We are seeing compelling evidence that marketers have embraced the Web site with significant sales and marketing strategies,” said ANA Vice President Robin Webster. “But at the same time, they long for reliable measurement and return on investment information.”

The survey also found that online advertising media is most often purchased by ad agencies (both traditional and interactive); the majority of the 30 percent of respondents to the ANA survey that purchase online media themselves are packaged good companies.

The most important criteria for online media planning are, according to the survey respondents: demographics of site visitors, suitable content, CPMs, and the ability to measure ads delivered. Three-quarters of the respondents have bought online online advertising on the basis of CPM. Almost as many have bought based on click rates.

Respondents also said the most important criteria for online media planning are: demographics of site visitors, suitable content, CPMs, and ads delivered. The most important post audit measurement criteria are click rates (56 percent), clicks (53 percent), CPMs (33 percent), and ads delivered (27 percent).

The ANA survey also asked respondents about their concerns with online advertising. The biggest concerns were the lack of proof of return on investment, cited by 68 percent of respondents, and a lack of reliable and accurate measurement information (58 percent). High CPMs appear to be a growing concern. Last year, they were cited by 27 percent of respondents, this year they were cited by 48 percent.

Other findings from the study include:

• More than half of the respondents developed new sites in the past 12 months at an average cost of $252,000
• The median cost of maintaining a Web site increased by 8 percent to $182,000
• The median cost of maintaining an e-commerce Web site is significantly higher at $275,000
• 44 percent of companies sell online; 36 percent plan to sell online in the next 12 months.

The ANA survey questioned 121 member companies about Web site management and Internet advertising. It is available for purchase through the ANA.