First-half shocker: Financial services cracked open the piggybank to advertise online during earlier this year despite troubles in the sector.
A report from TNS Media Intelligence released Wednesday reveals that financial services spent 23 percent more on online display ads during the first six months of 2008 than the same period in 2007. In contrast, Internet ad spending across all sectors increased 8 percent, year-over-year, in early 2008.
Why were financial services so bullish on Internet advertising despite bearish times?
Credit cards companies, banks, mortgage companies, investment brokers, and mutual funds find Web advertising is an effective medium, said Jon Swallen, the company’s SVP of research.
“Whether it’s a credit card offer or a mortgage offer or CD offer, a lot of those are transactions that can be completed on the Web,” Swallen said. “And let’s face it: The Web is a place where consumers do research and carry out a lot of financial-oriented transactions and purchase decisions, whether it’s doing online banking or checking out interest rates. The Web is a magnet for financial services products.”
Meanwhile, financial services ad spending was flat across other forms of media, he said.
Likewise, advertising in other media was flat or declined during the first half of the year compared to 2007, according to TNS. Here’s what the firm reports for the six-month period ended June 30:
- Total advertising expenditures decreased 1.6 percent compared to same period in the prior year.
- TV ad spending dropped by 0.4 percent.
- Magazine media advertising outlays declined by 1.8 percent.
- Newspapers recorded a 7.4 percent decrease.
- Radio advertising expenditures dropped 6.5 percent.
While the growth rate of spending on Internet display ads is slowing, Swallen said the sector is holding up. “The Internet is still performing better than any of the other media we track,” he said. “It’s the continuation of a trend that’s been in place for several years.”
Two years ago, Internet advertising was growing at a year-over-year rate of more than 12 percent, noted Swallen. He said the growth rate slowed over the past three quarters and is likely to continue declining during the third quarter of this year.
After financial services, dot-com businesses accounted for the second largest growth in online ad spending, recording a 14 percent increase compared to a year ago, according to TNS. They include companies such as Amazon that exist and sell only online.
TNS Media Intelligence does not track online video ad spending or search advertising. It does measure multi-part Flash-based ads and “anything with a graphical image,” explained Swallen. “Would I say display is representative of the entire Internet? No, that would be a stretch,” he said. “But it is still a very important segment and it may be indicative of larger trends taking place within Internet advertising.”
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