July 11, 2005
Search Ad Costs Slow
Separate surveys by investment banks SG Cowen and Piper Jaffray found the price of keywords advertising was mostly flat in the second quarter..
SG Cowen, which tracks 3,300 search terms, said prices declined 1.7 percent compared to the first three months of the year.
Piper Jaffray said pricing was "mostly stable," with some rises for search ads from Google.
The reports buttress figures released last week by Fathom Online, a San Francisco search agency, which said it found keyword pricing in June rose slightly for most industries it tracks.
June 21, 2005
Majority of Search Users Unaware of Ads
More than half of Internet users surveyed in a poll did not know the difference between natural search engine results and advertising listings.
The Harris Interactive survey of 2,000 Internet users was commissioned by New York search engine marketing agency iCrossing. It found that 56 percent of Internet users said they did not know the difference between "sponsored (paid) and natural (non-sponsored) search engine result listings."
June 16, 2005
Reader Shift to Web Papers Grows
More than one-fifth of readers of online newspapers have shifted their newspaper reading almost entirely to the Web, says a new report from Nielsen//NetRatings.
According to the latest Nielsen//NetRatings @Plan Summer 2005 report of online-versus-offline newspaper consumption, 21 percent of Web users who read newspapers have transferred their newspaper reading primarily to the Internet.
However, the vast majority of readers who access newspapers online, 72 percent, still pick up the print editions of their favorite newspapers.
As this shift toward online newspaper reading continues, newspapers are responding with more original content for the Web and added content that plays to the Web's strengths. "Many online editions now feature original content and have developed an online strategy that includes online message boards and editorial blogs, which leverage the medium's strengths of interactivity and immediacy," said Gerry Davidson, Nielsen//NetRatings senior media analyst in a statement.
Interestingly, the online-only newspaper reader is more often male. According to the report, men make up 53 percent of online readers, while women comprise 47 percent. Conversely, women account for 57 percent of those who read newspapers primarily in print.
Auto Sites Best for In-Market Car Buyers
Automotive ad campaigns appearing on business, news and sports Web sites have far less effect on purchase intent than those on car sites, according to new research.
Dynamic Logic, a New York research firm that gauges the brand effectiveness of online campaigns, found that Web sites of all stripes provided similar lift in aiding brand awareness, with auto sites only slightly outperforming business, news and sports sites.
When it comes to moving purchase intent, however, Dynamic Logic found ads on auto sites were twice as effective compared to business sites and news venues, and eight times more effective than sports sites. Dynamic Logic's auto category encompasses car-comparison sites, portals' auto sections and online consumer auto publications.
Dynamic Logic said the data, based on 175 automotive campaigns, suggests advertising geared to in-market car buyers should be mostly earmarked to auto sites rather than other verticals, which can be effective in providing awareness. Auto advertisers typically have different budgets for in-market car buyers and those not in the market.
Dynamic Logic recommends ads on auto sites focus on persuasion rather than awareness.
Automakers are heavy online advertisers, since 58 percent of car buyers said they prefer to use the Internet for research prior to purchase over traditional methods, according to a Keynote survey released in March. With inventory shortages at auto-specific sites like Edmunds.com and KellyBlueBook.com, some Web publishers are branching into the area to capture more auto advertising. Forbes.com in May launched ForbesAutos.com, a site devoted to luxury cars. Similarly, CNET the same month launched Car Tech, where consumers can compare vehicles based on technology features.
June 13, 2005
Broadband Seen Driving Web Ad Surge
Widespread adoption of high-speed Internet connections are leading to more online activity, particularly search engine use, according to an investment bank.
Merrill Lynch said in a note to client that it expects Web advertising to increase 29 percent this year to $12.4 billion. The bank said growth is being driven by performance-based advertising, mostly from search engines, which will account for 45 percent of online ad spending this year.
Lauren Rich Fine, Merrill Lynch's Internet analyst, said search engines, particularly Google, are seeing more online searches due to always-on broadband Web connections. Citing figures from ComScore, Merrill Lynch said the number of searches per user has exploded since late 2004, rising over 16 percent in the first quarter of 2005. The bank anticipates a 20 percent rise in overall search volume this year.
Fine attributes this to broadband connections, which Merrill Lynch expects will rise from 32.3 million U.S. homes in 2004 to 40.8 million homes by the end of this year, a 26 percent growth rate.
Google is projected to be the biggest beneficiary of broadband-fueled search increases. Fine forecasts Google will net revenues, excluding commissions paid to distribution partners, of $3.8 billion in 2005 and $5.2 billion in 2006.
Fine does not believe the trend toward performance-based online advertising will abate. From 2005 to 2009, she believes performance sales will rise from 45 percent of Web ad spending to 49 percent, with a 26 percent compound average growth rate.
June 07, 2005
Q1 Web Ad Spend Surges to $2.8 Billion
Internet ad spending continued to rise in the first quarter, expanding for the ninth straight quarter, according to industry estimates.
The Interactive Advertising Bureau and PricewaterhouseCoopers released the revenue estimates based on sales reports from online publishers and other Internet media providers.
The IAB noted the $2.8 billion estimate is the highest ever reported for a quarter, representing a 26 percent increase from last year's first quarter. The report also believes the industry expanded 4.3 percent from the fourth quarter, which traditionally attracts the highest ad spending from holiday promotions.
June 02, 2005
Broadband to Swamp Dial-up by 2010
In five years, broadband will displace dial-up connections in most Internet-connected U.S. households, according to Jupiter Research.
The New York research firm forecast that Internet penetration will slow in this country over the next five years, growing from 75 million at the end of 2004 to 88 million in 2010, a 17 percent increase. Based on population estimates by the U.S. Census Bureau, that would move U.S. Internet penetration from 70 percent to 77 percent.
June 01, 2005
Q1 Net Growth Outpaces Traditional Media
Total advertising spending during the first quarter of 2005 increased by a modest 4.4 percent to $33.5 billion versus same time period in 2004, according to a new report released Wednesday by TNS Media Intelligence.
The 4 percent gain marks the smallest increase in spending since the end of 2003, though spending did rise faster than the GDP; as it has in 10 of the last 11 quarters.
On the TV front, cable TV enjoyed solid growth of more than 18 percent to $3.5 billion for the quarter, as more and more dollars were siphoned from broadcast TV, which was up just 3.8 percent in spending. Meanwhile, Internet advertising continued to surge, though not nearly at the levels seen of late, as spending climbed by 8.2 percent versus last year to $1.9 billion.
In print, Sunday magazines were hot, posting growth of 14.5 percent to $398 million (a figure which reflects some expansion of TNS MI measurement base), while consumer magazines also increased by a healthy 9.5 percent to $4.7 billion. One of the smaller categories measured, local magazines exhibited the largest spending burst, rising 26.2 percent to $104 million.
But in the newsprint world, local and national newspapers, which account for 20 percent of total ad spend, showed anemic growth rates in first quarter. Local newspaper spending increased just .3 percent in the quarter, while national newspapers increased by 2.3 percent.
By total dollar amount, local newspapers and network TV led all categories at $5.9 billion and $5.8 billion, respectively.
May 27, 2005
Broadband Driving Web Ad Spend Higher
Web ad spending should grow 28 percent in 2005 to reach $12.3 billion, according to estimates by Goldman Sachs.
The investment bank said the presence of broadband Internet connections in about half of U.S. households has grabbed the attention of major advertisers, who can now use the Internet for video and other creative placements. Goldman expects this will siphon ad spending from other media.
In its report, Goldman Sachs said it believes online ad spending in the second quarter increased from the first quarter, putting online on course to near the 32 percent growth it experienced in 2003. By the end of the year, Goldman Sachs expects online advertising will be 4.4 percent of total U.S. advertising, as many advertisers earmark from 5 to 10 percent of total ad spending to the Web.
May 24, 2005
Third-Party Cookie Blocking Grows
More consumers are rejecting third-party cookies, according to a new study, making it more difficult for Web analytics providers and ad networks to track Web users.
WebTrends, a Portland, Ore.-based Web analytics provider, found blocking of third-party cookies - the tracking files used by entities other than the site a user is visiting - increased from 2.4 percent in January 2004 to 12.4 percent in April 2005. WebTrends attributed the rise to the adoption of Firefox and updated Internet Explorer service pack that reject third-party cookies as a default.
May 20, 2005
50-Plus Boomers Embrace the Web
It turns out, old people are quite active online, though when it comes to really old people, not so much.
According to a new report from eMarketer, the 50-plus, boomer-heavy market has embraced the Internet nearly as much as younger adults, while the senior market, while showing growth, has adopted the medium in smaller numbers.
Roughly 66 percent of adults ages 50-64 are online in 2005, says the report, while just 28 percent of adults 65 plus are online. By 2008, those numbers are expected to hit 74 percent for the 50-64 demographic, and 34 percent for true seniors.
Continue to Mediaweek
May 10, 2005
Media Use Shifts Online
Web users, particularly in younger demographics, are increasing the amount of time they spend perusing online media, according to a new survey, at the expense of television, newspapers and magazines.
Burst Media, a Burlington, Mass.-based online ad network, surveyed 2,600 Web users on their media-consumption habits. The poll found 61 percent said they spent more time using the Internet than a year ago. In contrast, 28 percent said the same for radio, 25 percent for TV, 24 percent for newspapers and 21 percent for magazines.
May 04, 2005
AQuantive Rides Rising Online Tide
AQuantive said clients are pouring money into online marketing initiatives, helping boost its revenue and profits.
The Seattle-based parent company of Avenue A/Razorfish reported first-quarter revenue of $65 million, up 187 percent from a year earlier, thanks to client spending growth and the Razorfish acquisition. Net income was $6.4 million, or 9 cents a share, up 55 percent from Q1 2004.
While aQuantive's growth was driven by acquisitions, the company said it recorded 61 percent organic revenue growth excluding results from businesses it bought.
May 03, 2005
More Ad Spending to Shift Online
Web advertising is set to become a $26 billion market in five years, driven by advertisers following consumer media habits that are migrating online, according to new research.
Forrester Research forecast the U.S. online advertising and marketing spending will increase 23 percent this year to reach $14.7 billion. In five years, the Cambridge, Mass., research firm expects Web marketing spending to rival cable TV and radio, accounting for $26 billion, 8 percent of total ad spending.
May 02, 2005
Digitas Q1 Net Income Up Sharply
Digitas said its first-quarter net income rose 40 percent, thanks to increased use of the Internet for brand marketing.
The Boston-based agency reported first-quarter net income of $10.4 million, or 11 cents per share, up from $7.4 million in the same period a year earlier. Fee revenue was $80.3 million, up 34 percent from the year-ago period.
Looking ahead, Digitas said it expects Q2 fee revenue between $85 million and $88 million, with earnings per share of 11 to 13 cents. For the year, the company forecasts $330 million to $340 million and earnings of 42 cents to 46 cents per share. The company attributed the revenue increases to marketing spending shifting from offline to online.
"We continue to acquire more of clients' brand-building spend," Digitas CEO David Kenny said in a statement. "Looking across 2005, we expect additional growth to come from momentum within our scaling and seed client segments, and as a result of increased opportunities for new clients under our two-agency model."
IAB: 2004 Web Ad Sales Up 33 Percent
Advertisers increased spending on Web advertising by 33 percent in 2004, according to a new compilation of the industry's revenue.
The Interactive Advertising Bureau, the main trade group for the Internet ad industry, said total Web ad spending hit $9.6 billion in 2004, up from $7.3 billion in 2003 and above the $8.1 billion level reached in 2000 at the height of the dot-com boom.
The IAB study, done by PricewaterhouseCoopers, found increased spending in all categories, led by a 50 percent increase in search advertising spending to $3.9 billion. Display advertising spending was $3.8 billion, up 17 percent.
Campaigns are eligible that use at least three distinct communication channels, including both traditional and non-traditional media. There is no limit in terms of the number of communication channels used and the length of the execution.
"It's a very healthy environment," said Pete Petrusky, director of advisory services for PricewaterhouseCoopers. "The industry is obviously doing well, especially vis a vis other ad segments."
The IAB found consumer advertisers, including automobile and retail companies, sharply increased their spending online, devoting $4.7 billion to Internet ads in 2004, a 74 percent increase from 2003. Other areas with spending spikes were financial services and pharmaceuticals. Financial services companies spent $1.6 billion online in 2004, up 82 percent; pharma and healthcare businesses spent $576 million on Internet ads, nearly double that spent a year earlier.
Petrusky said broadband adoption, which is estimated in 50 million U.S. households, has hit a level where advertisers would begin to move more money into branding ads. "The fact that broadband is in home more offers advertisers a platform for richer formats," he said.
April 20, 2005
Yahoo Sees Q1 Ad Boom
Yahoo said its first-quarter earnings more than doubled, thanks to more money coming to online advertising.
The Sunnyvale, Calif., company said it had net income of $205 million, up from $101 million in the previous year. Revenue was up 55 percent to $1.2 billion. Excluding revenue shared with search partners, Yahoo had revenue of $821 million.
Yahoo said its marketing revenue rose 44 percent to top $1 billion in the quarter. The company did not break out sales from search and brand advertising, although CEO Terry Semel told analysts in a conference call that growth came across the board.
According to estimates by Piper Jaffray, brand advertising revenue rose 35 percent from the same period a year earlier, though down seasonally from the traditionally more active fourth quarter. The investment bank estimated search revenue was up 13 percent from last year.
Yahoo reported it ended the quarter with 372 million users, a 36 percent increase from a year earlier. Importantly, those users spent more time on Yahoo, increasing average daily page views by 34 percent. Yahoo had 176 million active registered users at the end of the quarter, up 25 percent year over year.
Yahoo said a big driver of the increased user engagement was the spread of Internet broadband. About 70 percent of Yahoo users connect through high-speed lines, according to the company.
The ability to have it always on, always available, [and] the quality of the site has increased their usage," said Dan Rosensweig, Yahoo's chief operating officer, during the conference call.
Broadband Changing Internet Habits
The penetration of broadband is having a profound effect on consumer Internet habits, according to a study.
The study, completed by Forrester Research and Headline Vision for Yahoo and WPP Group's Mediaedge:cia, found broadband connections lead consumers to not only spend more time online but also broaden their Internet activities beyond tasks to include socializing, organizing and entertainment. According to the study, about 70 million Americans now have broadband connections.
April 07, 2005
Women Outnumber Men Online
Women continue to outnumber men online, and the gap should continue to expand, says a new report from eMarketer.
Having exceeded the male online population as of 2002, women accounted for nearly 52 percent of Internet users in 2004. eMarketer estimates 87.8 million women were online in 2004, versus 82.3 million men. As late as 1997, males made up 65 percent of all Internet users.
While the 2004 figures closely represent the current U.S. general population disparity, by 2008, women are projected to account for 53 percent of the online population, outnumbering men by roughly 10 million users.
March 28, 2005
Internet Reach Bests Magazines
A new study found that the Internet reaches more adults than magazines.
The Web moved ahead of magazines to fourth place with a daily reach of 51 percent versus 42 percent for magazines, according to The American Press Institute.
Television reaches more people than any other medium, with a daily reach of 94 percent of adults. Radio was ranked second, reaching 73 percent of adults, followed by newspapers at 59 percent.
The telephone-based poll, conducted by Roper Public Affairs & Media, surveyed more than 1,000 adults between January 19 and February 1, 2005. It is the latest version of a survey that has been updated for the past 35 years.
Adults also spend more time with TV compared to other media, averaging 272 viewing minutes daily. At 122 daily minutes, radio ranked second, followed by the Internet at 73 minutes, newspapers at 29 minutes and magazines at 19 minutes.
When asked to choose which medium was the most authoritative, most influential, most persuasive and most exciting, TV was No. 1 by a wide margin. Adults chose newspapers as the second most authoritative medium, and radio as the second most exciting medium.
The majority of survey respondents, 51 percent, also cited TV as the place where they were most likely to learn about products and brands. Magazines were second at 19 percent, followed by the Internet at 13 percent, newspapers at 12 percent, and radio last at 5 percent.
--Katy Bachman
March 24, 2005
Web Important for Car Research
A new study from Internet researcher Keynote Systems reaffirms the importance of the Web as a crucial research tool for car buyers.
The study, the Keynote Customer Experience Rankings, is based on both interview and behavioral research conducted with 2,000 consumers as they visited 10 leading auto sites, including Autobytel.com, Automotive.com, AutoTrader.com, cars.com, CarsDirect, Edmunds.com, Kelley Blue Book, MSN Autos, Vehix.com, and Yahoo Autos Web sites.
The study found that consumers are nearly as likely to visit an auto Web site as they are to visit a dealer when shopping for a new or used car; in fact, the Web is the first stop for most car shoppers, with 58 percent of consumers saying that they prefer to research vehicles online.
Though more consumers visit manufacturer's sites (76 percent) or visit dealerships (75 percent), the majority are likely to visit a third party auto site (65 percent). More shoppers report visiting these sites for research than they do use newspapers (just 53 percent of consumers with Internet access reported doing so).
Unlike most online shoppers, price is not as big a deal to car buyers visiting the Web. Rather, most respondents said they care more about sites' search and comparison functionality. The primary reasons cited for researching on third party sites include comparing models (66 percent did so), viewing reliability information (65 percent), and obtaining vehicle specifications, features, and options (63 percent).
Of course, one reason that pricing may not be a big factor is the fact that most shoppers do not yet close the deal online. While 35 percent of respondents expressed a potential interest in purchasing a car via the Web, the study found that users were generally anxious about submitting a request for a price quote online.
Of the ten sites measured, Kelley Blue Book and cars.com scored highest on the Keynote Customer Experience (CE) Rankings, which was composed of more than 250 metrics.
