Internet Not Sharing in Ad Industry Gains

Overall advertising spending for the first half of 2002 rose 2.3 percent over the same period last year, according to researcher Nielsen Monitor-Plus, but the online part of the business declined more than 8 percent.

Six of the nine media categories studied by Nielsen Monitor-Plus, a service of Nielsen Media Research, saw increases in advertising activity. Local newspapers showed the greatest growth, at 9 percent. Hispanic TV climbed almost 7 percent, a gain partially attributed to this year’s World Cup soccer tournament. Network, Cable, and Spot TV increased 2 to 3 percent, and Spot Radio grew by 1 percent.

Internet advertising, which showed an 8 percent decline over 2001, wasn’t alone in the doldrums. Syndicated TV advertising fell a commensurate amount, while National Magazines declined slightly.

The numbers don’t exactly jibe with the latest figures from the Interactive Advertising Bureau, PricewaterhouseCoopers, and CMR — although these studies only considered the first quarter of 2002. An IAB/PWC study released last week showed Internet advertising down an estimated 18 percent from the same period last year. CMR found Cable TV ad spending down 13.8 percent in the first quarter, while Magazines were down 9.6 percent, and National Newspapers experienced an 8.5 percent drop. CMR found Spot Radio up 9.5 percent, and Network TV rising 6.6 percent.

One is left either to conclude that things either changed significantly in the second quarter of 2002, or to resign oneself to the idea that the numbers are simply all over the map.

According to the Nielsen study, traditional media saw the largest share of dollars coming from the automobile category, followed by restaurants, motion pictures, department stores, and prescription drugs, while the music industry led the list of spenders on the Internet. Bertelsmann AG, with its BMG music club, and Columbia House dominated spending on the Internet, illustrating the ascendance of direct response advertising online.

Other retail categories followed the music advertisers, including, and Barnes & Noble. Several of 2001’s top advertisers do not appear in this year’s top ten, accordint to Nielsen. These include AOL Time Warner, eBay and Verisign. Newcomers to the upper echelon of advertisers include AT&T, USA Interactive and Citigroup.

It remains to be seen whether the decline will be offset by an increase in online direct marketing spending this year, as was predicted in June 2002 by research from Greenfield Online, DoubleClick and agency Beyond Interactive.

The firms’ Marketing Spending Index, which surveyed about 200 U.S. executives and brand managers, found that 61 percent of the respondents said they’re likely to increase email marketing budgets from last year.

“As companies’ revenue from their Web sites increases, online and email marketing are inevitably becoming larger components of the marketing mix,” said DoubleClick Chief Marketing Officer Susan Sachatello, when the survey was released.

Reprinted from Internet Advertising Report

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