Online Ad Spending Is Up - No Kidding?

Is it really any shock to hear that Internet advertising is up again this year?

For the 8th consecutive year, the number of dollars spent on Internet advertising has again gone up. In fact, the amount of money that advertisers spent on Internet related ads was the leading increase with 18.9% more than any other media category increase according to Nielsen. The next closest thing to the Internet was national magazines with only a 7.6% increase.

Newspaper advertising has shown a steady decline year after year and in a post about the impact of the Internet on newspapers I wrote almost a year ago, I asked the question; "will we see the death of a media in our generation?" Again, there was a decline in newsprint ad revenue which equaled over 7.5% which is up from last year's 5% decrease.

The one big surprise for me in 2007 was the increased dollars that are being spent on outdoor advertising. Normally when I hear outdoor I immediately think of traditional billboards. Now there are these fancy new-fangled digital billboards that have the capability of switching out the message very quickly to accommodate sales or whatever may be an immediate and time sensitive call to action. I have noticed that companies are also spending more money on things like vehicle wraps. From city buses to company cars, this too can be considered outdoor advertising.

According to Forrester Research, online spending is expected to hit $204 Billion, this year. Yes I said billion. The 3 big "C's" are going to continue to dominate the online market; clothes, computers and cars. The 3 of those combined will account for over 1/3 of all online sales or $70 billion.

Here's another interesting tid-bit from the recent surveys. Free shipping, a big draw in past is garnering less interest on both the consumer and the retailer levels. With the increase in ad AND consumer spending, we may see free shipping go bye bye for a while. However, I do think that it will surface frequently. After all the .99 cents or 99 dollars on almost all consumer goods has never gone away.

One last fact about demographics and online behavior and then I will leave you to your day.

"The casual shopper goes online to look for the best price, leveraging the transparency of the Internet to save money. However, more affluent customers appreciate the convenience of shopping online and are not necessarily looking for the best deal. Retailers would be wise to recognize there are significant opportunities within both audiences and should market to them accordingly." Via Forrester

Yeah, I still think this Internet thing is a fad. You'll have to pry my CB radio from my cold dead hands.