More NewsTNS: Internet Grows Its Share of Ad Spending

TNS: Internet Grows Its Share of Ad Spending

The Web's share of advertising rises sharply, while the ad business flounders.

Internet display advertising accounted for 6.4 percent of the overall U.S. ad spend during the first half of this year, compared to 5.6 percent for the same period in 2005, according to TNS Media Intelligence. The channel grew by 18.9 percent, from $3.9 million for the year-ago period to $4.7 billion this year.

“The total share of voice of the Internet has increased,” said Steven Fredericks, TNS Media Intelligence president and CEO.

The growth in overall U.S. ad spending was flat by comparison, climbing a mere 4.1 percent to $73 billion. Six of the top ten advertisers shrank their ad budgets for the period, according to TNS. Three of those – General Motors, Johnson & Johnson and Time Warner – gutted their total ad spend by over 13 percent.

The numbers were roughly in line with those released late last week by Nielsen Monitor-Plus and Nielsen//NetRatings.

Whereas the Web’s share of total ad spending is still below eight percent, some verticals are allocating twice that much. “We see above average category growth coming from financial services,” said Fredericks. “Each of the [top categories] is allocating about 15 percent of their total spend to the Internet.”

Fredericks expects the growth rate of Web ad spending will go even higher as he biggest offline advertisers commit more of their budgets to it. “Once the top 50 advertisers start to shift more of their dollars, the growth rate on the Internet could increase,” he said. “I think they would like to see more accountability relative to the Internet in terms of proof-of-performance.”

“Those types of measures are coming, and as it becomes more apparent and transparent regarding proof-of-performance measures, they’re becoming more comfortable and you’ll start to see dollars shift over there,” said Fredericks.

Other categories showing strength during the first six months of the year included Spanish language media and local magazines. Network TV spending grew by 5.7 percent, drawing 44.3 percent of all ad spending. Newspapers, local radio and national spot radio all shrank.

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