Study: Online Share of Budgets Grows in Canada

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Online advertising budgets are increasing in Canada as existing players invest more and new advertisers come aboard, according to a study by the Internet Advertising Bureau of Canada.


Of those respondents who advertised online last year, 32 percent reported increased online ad budgets for this year, a higher percentage growth than any other medium. And of those who did not advertise online last year, 25 percent expected to do so sometime this year.


"All the findings were telling, but the most unique finding was the budget challenges advertisers still face with regard to the online ad space," said Daintry Springer, executive director of IAB Canada in Toronto.


Conducted by ComQuest Research Inc., the 2002 Advertisers Executive Survey captured the attitudes, perceptions and behavior of senior decision makers in Canada. Concluded in May, 141 companies were surveyed from a sample of 500.


Of the companies surveyed, 43 percent advertised online with an average annual budget of $146,000. This does not compare with television, but it is at least higher than radio, a first for the Internet.


In other results, 73 percent of advertisers' online spends this year are allocations from marketing budgets as opposed to 65 percent last year. This means a steady move from promotional, communications or research budgets.


As far as media placement, 37 percent of the online ad budgets are being spent on content sites, 18 percent on portals and 10 percent on search engines.


English-language Canadian Web sites got most of the money last year. But many respondents this year plan to increase ad spend and exposure on French-language sites as well as U.S. and international sites.


The use of the Internet for online contests is 38 percent this year, up from 8 percent in 2001. Similarly, online coupons are up to 20 percent this year, from 5 percent in 2001, the survey found.


Two-thirds of the respondents said e-mail is becoming an important part of online advertising efforts.


"The one major trend IAB Canada will continue to monitor will be the preferred creative format advertisers are finding campaign success with," Springer said. "This report showed that rich media and streaming media were top of the list of the preferred ad formats. This statistic means that advertisers are very comfortable with these ad formats which are much more involved than simple banners."


Intermediaries, however, have to be careful. Fifty-eight percent of the advertisers surveyed said they often buy online ads directly from the media owner. The rest use traditional ad agencies, an interactive division of such a shop, a traditional media buying service, online buying services or an interactive agency.


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