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Online
Ad Spend Could Grow
By 30 Percent In 2005
Marketers will increase online ad spending by as much as 30 percent
in 2005, according to a recent survey of media planners and buyers
conducted by Deutsche Bank in conjunction with MediaPost, according
to MediaPost.com.
For the study, Deutsche Bank questioned 100 media executives in December
about their clients' experiences with Internet advertising in 2004
and their plans for this year. This survey, which was conducted online
by InsightExpress using members of the MediaPost advisory panel, is
the first of an ongoing series of quarterly studies of media professionals
by MediaPost and Deutsche Bank.
The results pointed to a continued strength in online marketing, with
media executives saying not only that their clients upped their online
spending during the end-of-year holiday season, but also that they
expected to increase it even more in the first quarter of this year,
MediaPost says.
"There's good momentum coming in to Q1," said Deutsche Bank
Senior Analyst Jeetil Patel to MediaPost.com. "Marketers are
actually budgeting interactive into their media mix." Eighty
percent of respondents forecast that their clients would spend more
in the first three months of 2005 than in the last three months of
last year. Nearly one out of three respondents--27 percent--expected
their clients would spend between 11 percent and 30 percent more in
the first quarter of this year than the last quarter of 2004. An additional
12 percent of respondents expected their clients' first-quarter online
budgets to spike by 30 percent or more, while 41 percent expected
their clients to up spending by 10 percent more in the first quarter
of 2005 than the last three months of last year.
Based on the responses showing an increased ad spend in the first
quarter--a traditionally slow advertising season--Deutsche Bank predicted
a year-over-year leap in Internet advertising by up to 30 percent,
said Patel. That's about the same as the increase from 2003 to last
year, according to eMarketer estimates.
Media execs surveyed also reported a rise in the cost of inventory
for the fourth quarter. Ten percent of respondents thought cost-per-thousand
impressions rose by at least 11 percent, while 62 percent said it
increased by 10 percent or less. An additional 28 percent reported
a decrease in cost-per-thousand impressions.
When it came to premium inventory, the price increase was steeper.
Thirty-two percent of respondents said the cost-per-thousand impressions
premium spots--streaming video, top-layer rich media, full-page arrivals,
and the like--jumped by between 11 percent and 30 percent; an additional
5 percent of respondents said the price hike was at least 30 percent.
Slightly more than half of respondents--51 percent--reported a price
hike of up to 10 percent for premium inventory, while only 3 percent
of respondents said premium costs dropped.
Respondents allocated more ad dollars to branding campaigns than other
types of advertising. They said they allocated 41.8 percent of their
clients' online dollars to branded ads, 24.1 percent to direct response,
15.3 percent to paid search, 10.3 percent to e-mail, 4.9 percent to
affiliate marketing, and 3.6 percent to other Internet advertising.
Published on January 13, 2005
Digital Cover
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