Online Ad Spending to Reach $6.3B in 2003: eMarketer

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Online ad spending is to hit $6.3 billion in the United States this year, up from $6 billion in 2002, according to a report research aggregator eMarketer is expected to release tomorrow.


Not surprisingly, however, online ad spending remains a fraction, or about 2.5 percent, of total U.S. ad spending.


Total media spending nationally will be $248.25 billion this year, up 4.9 percent from $236.75 billion last year, according to eMarketer, New York.


Meanwhile, online ad spending is expected to grow to $8.1 billion in 2006. This would finally return online ad spending to the level of 2000 just before the bottom fell out of the Internet ad market, according to eMarketer. Total media spending in 2006 will be $293 billion, the report said.


In 2004, online ad spending will be $6.8 billion compared with total media spending of $263.5 billion. In 2005, online ad spending will be $7.2 billion compared with total media spending of $277.5 billion, the report predicts.


Online ad spending was 3.3 percent of all media spending in 2000, then began to drop. It was 2.5 percent of overall ad spending nationally in 2002, and is projected at 2.5 percent for 2003 and 2.6 percent for 2004 and 2005, eMarketer said. Online ad spending will reach 2.8 percent by 2006, eMarketer said.


Internet ad spending was $1.52 billion for first-quarter 2003, compared with $1.35 billion for the same quarter in 2002, an increase of more than 12 percent. This is substantially higher than the 4.9 percent average growth rate for ad spending on other media in the same period, eMarketer said.


Cable television was another first-quarter standout with ad revenue rising 18 percent from $2.124 billion in first-quarter 2002 to more than $2.506 billion in first-quarter 2003.


Ad spending in consumer magazines also rose 12 percent from $3.307 billion in first-quarter 2002 to $3.706 billion in first-quarter 2003, eMarketer said.


Among other notable findings in eMarketer's ad spending report is that performance-based-advertising deals accounted for 21 percent of online ad revenue in 2002, up from 12 percent in 2001 and 10 percent in 2000.


However, cost-per-thousand deals accounted for 45 percent of online ad revenue in 2002, compared with 48 percent in 2001 and 43 percent in 2000. Hybrid deals accounted for 34 percent of online ad revenue in 2002, compared with 40 percent in 2001 and 47 percent in 2000.


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