Web Ad Spending Grows Faster Than TV

By: Ann M. Mack (Adweek IQ) Online ad expenditures outpaced TV in terms of growth last year as large traditional advertisers began to spend more on the Internet, according to a joint report released by Nielsen//NetRatings and DoubleClick.

The study, which augmented DoubleClick's ad-serving data with online and offline spending reports from Nielsen Monitor-Plus and Nielsen//NetRatings AdRelevance, respectively, found that Web ad expenditures in the first quarter of 2003 rose 11%, versus TV's, which increased 3%. Ad spending growth slowed for the Internet by the third quarter to 6%, but still surpassed TV's 3.5% boost.

According to the Interactive Advertising Bureau, online ad spending surged 20% last year to $7.2 billion.

Automotive and telecommunications marketers contributed to the rise, each category upping their ad impressions on the Web in 2003 over the year before by 75% and 32%, respectively. The telecom sector's increased investment in the Internet was reflected by SBC Communications, whose year-over-year online ad spend rose 168%, AT&T Wireless (21%) and Verizon Communications (5%).

The financial services category also was well represented by Ameritrade, whose online ad expenditures grew 23%, BankOne (12%), Scottrade (27%), Ameriquest (353%), Citigroup (4%) and LowerMyBills (775%). (Of course, some of the companies with notable growth were working from a small base.)

The report also found that the Internet now accounts for 49% of ad spending done by business-proposition and employment-recruiting companies and 15% of that done by travel companies.

"Last year marked the first time that large traditional advertisers began to spend more online," said Charles Buchwalter, vice president of analytics at Nielsen//NetRatings, a part of Adweek parent VNU. "While the online medium is still relatively young, the growth of broadband paints a promising picture for online ads, as advertisers recognize that people are spending more time online and consuming more online media."