| Online News Ads Jump
Online advertisers spent 22 percent more in the first quarter at newspaper Web sites than they did a year earlier, the Newspaper Association of America reported. The increase led to $750 million in total online ad revenue for publishers. The Arlington, Va.-based trade group said the increase reflects the 12th consecutive quarter of double digit gains for online newspaper advertising since tracking began in 2004. The growth in online advertising came even as overall newspaper ad revenue dropped 5 percent, “The percentage of ad spending generated by newspaper Web sites continues to grow as advertisers realize the value of the medium’s Web audience — a group of consumers who have higher household incomes and shop online more frequently than other Internet users,” NAA President and CEO John F. Sturm said in the statement. “We expect advertising on newspaper Web sites to continue to contribute to the industry’s overall revenue stream as newspapers provide innovative content and up-to-the-minute news and information our audience demands,” he added. |
Record Internet Advertising Spending on Internet advertising reached a record — again. Online ad spending was $16.9 billion during 2006, according to a report from The Interactive Advertising Bureau and PricewaterhouseCoopers LLP. The figure was up 35 percent from 2005 and represented the third consecutive annual record. While Internet advertising is just a fraction of overall advertising revenue — which totaled $285 billion last year, the study said the growth rate is exceeding that experienced in the early years of television and radio. For just the fourth quarter, Internet ads generated a milestone $4.8 billion in revenues — also up 35 percent from a year earlier and 14 percent higher than the third quarter, IAB reported. “Interactive advertising revenues continue to show solid growth as advertisers and agencies recognize that it is a medium that can uniquely affect consumer behavior from product awareness, to purchase intent, to actual purchase and then brand loyalty,” IAB President and CEO Randall Rothenberg said in the announcement. “We have every confidence that this growth trend will continue as marketers allocate more of their total marketing dollars to interactive and the industry delivers effective and innovative platforms for connecting with consumers.” Online display ad revenue, which jumped from $2.5 billion in 2005 to $3.7 billion last year, and online lead generation revenue, climbing to $1.3 billion in 2006 from $0.8 billion the year prior, were listed among types of advertising that are growing at a healthy pace. “Online publishers may continue to experience growth as marketing budget allocations to all interactive forms continue to increase,” PricewaterhouseCoopers Director Peter Petrusky said in the statement. The ten biggest online advertisers accounted for 69 percent of 4th quarter revenues, the report indicated. Financial services advertisers were reportedly the second largest category of spenders with $2.7 billion in revenue generated for last year. The 2006 figure was 12 percent higher than the prior year. Financial services includes banks, finance companies and other lending institutions. Media was about half of the level of financial services, flat year-over-year, the report said. Media includes television, radio and news publishers.
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Online Spending to Balloon at Financial Co.s Financial services companies have more than doubled their spending on Internet advertising during the past four years and are projected to continue spending more. The sector is projected to spend $2.4 billion this year for online ads, up from $0.9 billion in 2003, eMarketer said in its report, Financial Services Online Marketing. By 2010, financial companies are expected to push the figure up to $3.5 billion. “Although global stock markets sawmarked drops in June, an economic slowdown will actually cause more consumers to go online to find the best interest rates and payment terms, as well as to keep a closer eye on their financial accounts,” eMarketer said. “Changes within financial categories will require changes in marketing strategies, along with more spending.” The report noted e-mail marketing is unreliable because of consumers’ fear of fraud, identity theft and phishing. Mortgage companies, which account for more than 20 percent of spam, “are the most notorious worldwide spammers.” More than a third of all keyword searches for financial products are for “mortgage,” according to the report. Mortgages are judged on interest rates, as well as terms of payment, but can come from companies based anywhere in the country. The cost of keyword advertising in the mortgage sector has fallen but is expected to go higher, e-marketer said. Between September 2004 and June 2005 — when real estate was booming, marketers were paying as much as $6.49 for mortgage-related keywords. By December 2005, the price had fallen to $3.30 — still the highest prices of any industry. And e-marketer predicts mortgage-related keyword prices will climb higher as the pool of prospects diminishes. Among the biggest online mortgage advertisers from March 2005 to February 2006 were former ResCap parent GM, Ameriquest Mortgage and Quicken Loans, the report indicated. At the same time that electronic advertising is growing, the benefit from direct mail is declining, eMarketer reported. Consumers, inundated with a record amount of postal mail pieces during recent years, are responding less to the medium.
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