Media planning changes as advertisers follow Marketing
During the Interactive Advertising World Conference and Expo in New York last year, the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) released the Internet Advertising Revenue Report covering Q2 and the first six months of 2004. Internet advertising revenues (U.S.) for the first six months of 2004 were approximately $4.6 billion—a 39.7% increase over the first half of 2003. Internet advertising revenue totalled approximately $2.37 billion for the second quarter of 2004, representing a 42.7% increase over same period 2003. Q2 2004 revenues represent a 6% increase over Q1 2004.
"Internet Advertising is without question taking share from the other media at this time and for good reason—marketers have figured out that online advertising is often the most cost effective medium for influencing both branding and sales results. This data is fuelled by recent public announcements that online ad budgets are dramatically increasing, for instance approximately 25% is going online for Ford’s Lincoln Mercury and approximately 50% for Vonage,” said Greg Stuart, President & CEO of the IAB.
Ad Formats As compared to 2Q 2003, four formats experienced significant year over year growth. For example, Search has grown 97% in absolute dollars and Rich Media has grown 27% in absolute dollars.
Industry Categories "The tipping point goes by vertical business," said Jeetil Patel, senior analyst, Deutsche Bank Securities. Patel expects spending toward online media to increase in the consumer packaged goods, retail, and pharmaceutical categories.
In the second quarter of 2004, consumer advertisers continued to lead the way in online advertising spending, accounting for 49 percent of total revenues, up sharply from the same period last year.
Patel says that while Internet media represents 14 percent of consumers' media consumption, it remains at just 3 percent of most marketers' budgets. He says that online media consumption by teens is a trend to watch. According to eMarketer, 40 million households will have broadband by 2005—and these constitute 35 percent of all homes in America. DB estimates that 50 percent of all homes will have broadband by 2007.
Media planning changes The consensus of the week's panels was that marketers are beginning to manage their media planning and buying strategy as a whole, rather than as segregated channels. The move clearly benefits online advertising. "I am trying to educate people to see it as a set of 'and,'" said John Stichweh, section manager of interactive marketing for the global beauty business unit of Procter & Gamble Co. "It's going to be TV and print and interactive."
Marketers are also spending more for brand building campaigns online. Sarah Fay, president of Aegis Group's Carat Interactive, a media-buying agency believes this is partly because online brand metrics are now available from interactive market research. "Adidas", she said, plans to increase its budget for interactive by double digits next year, following the success of its "Impossible Is Nothing" campaign, which was its largest online effort to date. The effort, which "Carat Interactive", handled, featured an online ad of a young Muhammad Ali boxing with his daughter, Laila Ali. Consumers clicked into the online video ad 5 million times, she said. (The ad also ran on TV.)
Following consumers online In putting the focus online, marketers are following consumers. All age groups up to age 54 now choose the Internet as their top media choice, according to the Generational Media Study, released by the "Online Publishers Association" at Advertising Week. More than 70% of three age groups studied use the Internet for entertainment, and 67% of 25- to 34-year-olds and 35- to 54-year-olds said content on the Internet provides them with useful information about products and services.
Consumers find the Internet indispensable, according to the Internet Deprivation Study presented at the conference by " Yahoo!" and OMD, the media buying and planning arm of "WPP Group". When 28 people promised to stay off the Internet for two weeks (they got $150 to do so), they struggled to figure out how to pay bills, make vacation plans, take work breaks, read the news and keep in touch with friends. Nearly half of the respondents said the Internet had become so pervasive in their lives they relied on it to manage personal and professional relationships.
