Online Is Ad Spending Bright Spot

SEPTEMBER 24, 2007

Ad flux expected to continue through year-end.

Internet display advertising grew 17.7% to $5.52 billion during the second quarter of 2007, according to TNS Media Intelligence.

However, TNS found total ad spending in the first half of 2007 fell 0.3% to $72.59 billion versus the same period in 2006.

"For the first time since 2001, media advertising expenditures have declined for two consecutive quarters," said Steven Fredericks, CEO of TNS Media Intelligence, in a statement. "Given the uncertainties about near-term economic growth and consumer spending, we expect core ad spending will continue to face challenges during the second half of the year."

The results differ by industry, TNS research director Jon Swallen told eMarketer.

"For example, financial services advertisers are moving more money to Internet display ads from other media," Mr. Swallen said. "The Internet gets about $22 out of every $100 in financial services ad spending. By contrast, pharmaceutical firms are not making the same moves and are underallocating to display.

"Internet spending growth used to be driven by small and midsize businesses," he said. "Now it's the large companies like consumer packaged goods firms which are getting more into the Internet. The percentage of budget allocated to display by the top 50 blue-chip firms is still comparatively low, but that's changing."

eMarketer's own US online ad spending estimates include search and video figures as well as display. In 2007, eMarketer estimates that total online ad spending will reach $21.7 billion, up from $16.9 billion in 2006.