10.16.03
 By
Rocky Lewis
It’s that time of year again -- time to get serious and make final
decisions about 2004 online and offline marketing budgets, time to
update the business plan, and time to dig up that allusive research
that we all use to justify long-term decision making. Here are some
figures and predicted trends from recent online-marketing studies,
which are worth keeping in mind when developing 2004 proposals and
internal marketing plans.
First and foremost, the online marketing industry is on the
upswing. Ad revenues were up 7% in Quarter 1 of 2003 compared to Quarter
4 of 2002, according to the August 20, 2003 Ad Revenue Report from
the Interactive Advertising Bureau
(IAB), and PricewaterhouseCoopers
(PwC). That’s an increase of 11% compared to Quarter 1 results from
2002.
These positive trends match up with prediction figures from IAB, PwC,
and eMarketer. Robyn Greenspan
at Internet.com compiled data from the research giants and relayed
these figures in her July 15, 2003 article titled, “U.S.
Online Ad Growth Underway.” |
"Aggregated data from eMarketer reveals online ad spending to reach
$6.3 billion by the end of 2003 for a 4.8% growth rate over 2002's
$6 billion, and slowly climbing to $6.8 billion in 2004 and $7.2 billion
in 2005.”
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So why are things back on track? Mainly because paid search continues
to pay off. Those same studies from the IAB and PwC reveal that the
paid search market doubled in 2002, bringing in $635 million. This
represented a growth for paid search’s role in the overall ad revenue
from 4% in 2001 to 15% in 2002. And, with the category carrying 21%
of “total ad format revenues” in the Quarter 4 2002, statistics on
paid search growth are expected to keep climbing.
In fact, after surveying marketing executives in April 2003, Jupiter
Research also expects steady growth in paid search’s future. Brian
Morrissey at Jupiter Media compiled research from that survey to publish,
“Search
Powers Online Ad Revival” on July 30, 2003 .
Morrissey summarizes, “Jupiter pegs the paid search market as worth
$1.6 billion this year, after growing at a 48% clip. Over the next
five years, the researcher expects spending on search to increase
by a compound annual rate of more than 20%. In 2008, Jupiter forecasts
companies will spend $4.3 billion on search, accounting for 29% of
the $14.8 billion online advertising market.”
Jupiter is basing these projected numbers on information given by
the marketing executives polled in that April study – 82% from large
firms and 61% from smaller firms said they planned to spend more on
search marketing in the future. Why are they planning to spend more?
Because, relates Morrissey, 74% of executives with a “big budget”
rated search marketing as “better” or “much better” than banner ads,
even though banner advertising lead online ad spending in 2002 at
29%.
This all makes sense considering that search engines continue to grow
as one of the best ways to reach a new audience. At least that’s what
a March 6, 2003 , WebSideStory
StatMarket
study claimed. It said search engines generated 13.4% of site
referrals on the day measured, up from 7.1% measured a year earlier.
Although the data was collected on only one day, it was compared against
data collected from other days, and vice president of product marketing
for StatMarket, Geoff Johnston, said the March 6th data was consistent
with overall trends. WebSideStory data also showed an over 15% yearly
growth in direct navigation as a site referrer, but web links fell
from 42.6% to 21%.
In general, web marketing is going to start whittling away at traditional
marketing budget dollars in the coming years. GreenSpan’s July 15
article on IAB and PwC numbers states, “ U.S. online advertising spending
is expected to account for $8.1 billion of the country's $293 billion
total media budget by 2006, marking a return to 2000's Internet spending
spree figures.”
While the exact numbers from the Jupiter study are different from
PwC’s, Jupiter agrees with this optimism, stating that, by 2008, it
expects online marketing will grab 6.1% of total advertising spending,
up from 3.3% this year.
Finally, as some kind of giant but slow endorsement, a spring 2003
study from Nielsen/NetRatings
reported that top 100 traditional advertisers (like AOL, Microsoft,
Ford) have finally started to make online advertising a “noticeable
part of the media mix.”
Brian Morrissey at Jupiter Media compiled data from Nielsen/NetRatings
in a March
20, 2003 article that outlined the degree to which the Big Boys
were coming around to online spending. When it came to ad impressions
for 2002, the top 100 traditional advertisers' share was 30% – doubling
from two years ago when the top 100 made up just 15%. Morrissey also
reported on a Nielsen/NetRatings Fortune 500 study. “In that study,
it found more than half the group ran at least one online ad campaign
during the year [2002], up 6% from 2001.”
So now that you have some statistical data about spending online,
it’s time to put statistical data, generally, into perspective. French
Philosopher Jean Baudrillard is quoted as saying, “Like dreams, statistics
are a form of wish fulfillment.” And never does this seem truer than
when re-reading some stats from 1999. Try on this Forrester
Research forecasted data compiled in an August
1999 article by Michael Pastore at Internet.com. "Forrester projects
that online advertising spending in the U.S. will grow from $2.8 billion
to $22 billion by 2004.”
Ah, the good ole days. So, on one hand, we have to take all these
figures with a grain of salt. On the other, it’s good to have some
survey data to back up what intuition, client testimonials, and personal
experience has been telling online marketers for years – the web (and
search) marketing industry is growing because it delivers results!
About the Author:
Rocky Lewis is the vice president and co-founder of SageRock.com,
rated a top search engine marketing firm by the Marketing Sherpa Buyer's
Guide to Search Engine Optimization, TopSeos.com,
and other industry sites and associations.
Read this newsletter at:
http://www.WebProBusiness.com/2003/1016.html |
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| From
the Forum: |
| CJ contextual ads? |
 I
just found a very interesting article in WebProNews about
CJU. The only in-depth report I have seen.The author presents
some really good info.
I don't know him or how correct the info is. Just passing
the article on for your comments....
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