Technology | Media | Telecommunications

Tuesday, July 22, 2008

Online Ad Spend Exceeds TV-Radio-Movies

American advertisers are cutting back. Spending on U.S. advertising and marketing will grow 3.9 percent in 2008 to reach $412.4 billion -- with the advertising portion reaching $249.1 billion, according to a market study by Outsell, Inc.

Reflecting the overall economic slowdown, the growth rate for advertising and marketing spending has declined from 5.8 percent in 2007.

Outsell takes a 360-degree look at total U.S. advertising and marketing spending targeting both businesses and consumers, and covering 31 advertising and marketing methods.

Their report covers five key media types -- online, print, events, TV/radio and others. Outsell surveyed 1,088 U.S. advertisers on their spending plans for the year.

Outsell's key findings include:

- Companies are spending 61.8 percent of their online ad/marketing budgets on their own web sites, siphoning dollars away from other options. This accounts for $65.1 billion. As a result, publishers are beginning to offer their own advertising or marketing services to recapture lost revenue.

- No surprise, the fastest growing of all ad types is online, which is expected to grow 12.3 percent in 2008 to $105.3 billion (or $40.2 billion excluding advertiser's spending on their own sites). This represents a major turning point in online spending, which now exceeds TV/radio/movies for the first time ($98.5 billion).

- Advertiser's spending on traditional media remains significant -- with print capturing 35.5 percent of spending ($147.0 billion) and events at 12.5 percent of the total ($51.7 billion). Fifty-four percent of advertisers spread budgets across three or more media types.

- Out of 26 methods measured for effectiveness, advertisers rate their Websites as the best for lead generation (75 percent effective), followed by exhibitions (66 percent), custom print publications (65 percent), direct mail marketing (64 percent), and trade magazines (64 percent).

- When asked, "If you could only track three [new media] metrics, what would they be?" advertisers point most frequently to cost per sale (46 percent), cost per lead (37 percent), and cost per click (32 percent).