Web-Wise. Expect 2007 to get even Rosier

Looking ahead to 2007, two things will distinguish internet advertising. First, it will outpace all other media in terms of forecasted growth, and second, it will most likely outpace those forecasts as well.

If typically in media spending seems to fall short of forecasts, when it comes to the internet spending typically grows faster than even the rosiest predictions. That most likely will happen again in 2007, when spending is expected to grow as much as 30 percent. Internet advertising has been growing ahead of expectations just about everywhere, despite the fact that the expectations are very high.

Case in point: 2006 internet spending growth projections varied but were in the range of 20 percent. With the first three quarters now in, spending, including search, actually paced at 49 percent, according to Nielsen Monitor-Plus. While that's an extreme gap, it illustrates just how far off forecasts can be.

Just why the gap between forecasts and actual growth is interesting. One reason is that with so much hoopla over web spending growth, forecasters are inclined to err on the side of caution, lest they appear caught up in the frenzy.

But the bigger factor is that forecasters are forever behind the curve, projecting growth based on the sectors that showed the most growth that year, at a time when marketers are busy coming up with new ways to advertise on the internet.

New opportunities for advertisers spring up faster than forecasters can factor them into their forecasting equations. Tied into that is a natural momentum of growth stemming from the disequilibrium between how much consumers use the internet and the share of media dollars that are spent on it.

Media consumption patterns are changing faster than predicted and spending is shooting ahead as advertisers are pushed to move online faster than expected to reach their target audiences as their internet use surges.

There's still a lot of catching up to do. The internet's share of media consumption is now between 15 to 20 percent, while its share of ad spending is between 4 percent and 5 percent.

The question looking into 2007 is whether this pattern will repeat itself. Some forecasters think the pace of internet advertising growth may actually slow slightly.

Source: MediaLife

Online Job Ad Revenues Surpass Print

Employers spent more on online recruitment advertising than newspaper job ads, $5.9 billion to $5.4 billion for the first time in 2006.

According to market research firm Borrell Associates Inc, the online shift will continue over the next five years as Internet job listings hit $10 billion in 2011 or 13.7% of overall recruitment dollars compared to 6.5% for newspaper ads.

Much of the online growth is expected to come from small and medium-sized businesses posting local ads for hourly and part-time workers. Already, two-thirds of online job revenues are generated by niche boards or regional Web sites focusing on specific categories such as nursing, technology or food services. Rivals Monster and CareerBuilder, respectively, control 14% and 12% of the online job market, while newspapers not affiliated with either job site claim 8%.

Monster has taken aggressive steps this year to boost its share of local job ads by forging partnerships with newspapers dumping CareerBuilder such as The Philadelphia Inquirer, the Wilkes-Barre Times Leader and the Akron Beacon Journal. Yahoo's HotJobs also made a play for more local classifieds, striking agreements with eight publishing companies representing more than 200 newspapers nationwide.

The study warned that the deals may not turn out so well for the online partners, either. Because papers rely heavily on converting print advertisers to online ones, Monster and HotJobs may find revenue gains elusive.

While free-listing sites such as Craigslist and Google Base have been seen as among the biggest threats to newspaper classifieds, they'll "continue to take bites out of the recruitment listings and revenue pies.

With only about one-third of U.S. job-seekers saying they planned to search the Internet for work in 2006, the report projects plenty of upside remaining for recruitment spending online.

Source: MediaPost

Newspaper Audiences boost Online Shopping

Newspaper website audiences are more likely to be avid online shoppers than average Internet users i.e. they are spending more than the average Internet user on online purchases according to a study conducted by Scarborough Research .

In five local markets studied, Sacramento, Houston, Providence, Orlando, and Kansas City newspaper website readers are more likely than other Internet users to be spending upwards of $1,000 online annually. The study reports that newspaper website readers are more likely than average Internet users in their local markets to have made a purchase in leading e-shopping categories including airline tickets and other travel reservations, books and clothing.

Combining newspaper website readers' offline and online behaviors in top categories reaches further heights. In Houston, readers are 34 percent more likely than all Internet users in the market to purchase travel reservations online, and these adults are also 24 percent more likely than the average Internet user in Houston to have traveled to the Caribbean during the past three years, and 16 percent more likely to have visited Europe.

Newspaper website readers are generally among the most avid Internet users in a local market. They are more likely than the average Internet user to spend 20 hours or more online in the average week and more likely to have broadband internet connections at home.

Source: Scarborough Research

Online Display Ads Increase 2% In November

Online Marketers ran 259.6 billion display ads last month, up from 254.2 billion in October.

Financial services advertisers accounted for more ads than marketers in any other category, 25% last month but that proportion was down from 30% in October and 28% in September.

Web media accounted for the second-largest category, with 20% of impressions, up from 17% in October. Retail goods and services accounted for 16% of impressions, the same as in October while telecoms accounted for 10%, also flat from October. Rounding out the top five categories was public services, with 9% of impressions, up slightly from October's 8%.

E-mail sites accounted for 47.5% of last month's impressions, with Yahoo's e-mail service drawing 40.4% of ads and MSN Hotmail accounting for 5.7%. All of those numbers were down slightly from October, when e-mail accounted for the majority of impressions, 51.1% with Yahoo's e-mail service garnering 43.6% of ads, and MSN Hotmail claiming 6.3%.

Last month, general community sites drew 15.3% of impressions, with MySpace alone claiming 14.3%. Those figures also marked a drop from October, when general community sites drew 16.8% of impressions and MySpace accounted for 15.9%.

In addition, portals and search engines garnered 7.4% of impressions, down slightly from October's 7.7%. General/national news sites accounted for 4.4%, up from 3.9% and entertainment sites drew 3.4%, up from October's 2.7%.

Source: MediaPost

Advertisers Upbeat On Spending For Next Six Months

Weeks after some of Madison Avenue's leading forecasters released revised and generally moderate outlooks for U.S. and worldwide ad spending for the year ahead, new research reveals that advertisers and agency media executives are generally upbeat on their spending plans for most of the major media over the next six months.

The findings, which come from the just-completed fall wave of Advertiser Perceptions' survey of 2,400 media decision makers, reveal growing confidence on their spending plans for all media with the exception of radio and local newspapers. Perhaps most interesting of all, a slightly higher percentage of the ad executives plan to increase their budgets for TV than for online media.

That last point is consistent with estimates being released by the major ad forecasters, which indicate that despite the high rate of double-digit growth coming from online media, TV continues to be the biggest single contributor of the growth in overall advertising spending.

TV, for example, is projected to contribute 46% of the overall increase in North American ad spending and 50% of worldwide ad spending next year, according to the latest edition of "This Year, Next Year: Worldwide Media and Marketing Forecasts," released Wednesday by WPP's GroupM unit. The Internet, will be the second-biggest factor, contributing 41% of the North American ad expansion, and 28% of the global ad expansion in 2007. Outdoor will actually be the third-biggest contributor at 7%.

One factor fueling television's growth in the U.S. marketplace is the rapid expansion of Spanish-language television, which is actually growing faster than online display advertising in the market. In addition, the U.S. TV marketplace continues to expand via growth in new and emerging outlets, as well as new brands using the medium.

Another factor slowing the Internet's contribution, is that online advertising costs are generally more efficient than the old media they are substituting in advertising budgets i.e. advertisers don't need to spend as much as they had been before to generate the same kind of results.

Whatever the precise factors influencing ad spending sentiment, the pattern is clear according to the Advertiser Perceptions study. Nearly a third 31% plan to boost their TV ad spending over the next six months, versus only 29% who plan to increase it for online media, and 25% for print media.

Source: MediaPost

Teens: Big Consumers of Technology

According to a study released by the Harrison Group this week, Americans aged 13 to 18 spend more than 72 hours a week using electronic media, defined as the Internet, Cell Phones, Television, Music and Video Games. Because teens are known for multitasking, their usage of devices can overlap.

The study estimates that despite their age, teens have great purchasing power, thanks to money coming in from part-time jobs and parents. Teenagers spend about $195 billion annually on clothes, eating out, cars, movies and cell phones, according to the report.

They're also spending money on technology. For 2006, one-third of teens reported owning an Apple Computer iPod, up from only 1 percent in 2003, according to the study. More than half said they also own and play Sony's PlayStation 2, and one-third said they own an original Microsoft Xbox game console. But as many as three quarters reported playing video games on a regular basis.

As you might expect, music is high on the average teen's to-do list. Their love of music is second only to their love of friends and even ahead of their love of family, according to the study.

75 percent of teens spend two or three hours a day downloading or listening to music online. Roughly half of those kids say that downloading music for free is illegal. But 41 percent are unconcerned with the ramifications or ethics of illegal downloads.

An estimated 68 percent of teens have created profiles on social networks like MySpace.com, Xanga or Facebook. More than a quarter of the population keeps in touch with friends online on a daily basis, either through instant messaging, e-mail, message boards or chat rooms.

Source: CNET News

Social Networking Sites Fuel E-Commerce Traffic

Social networking sites including MySpace and Facebook are driving a bigger portion of traffic to retail sites than a year ago, according to new research by Hitwise. Social sites are driving more than 6% of retail traffic, up from 2.9% in 2005. MySpace alone accounted for about one-third of that traffic.

The increase in retail traffic reflects social sites increasingly becoming a starting point for Web users. What we're seeing is a trend among social networking sites, particularly MySpace, becoming a home base for Internet users. That trend in turn generates more traffic from social sites to online retailers.

Search engines continue to be the main avenue through which people navigate to Internet shops, driving nearly 26% of their traffic. Competing online retailers sent a nearly equal portion of visitors, followed by email services at 9.6% and Web directories, including comparison shopping sites, at 5.6%.

Hitwise is tracking traffic to 19,000 online retailers this year compared to 10,000 last year, highlighting an e-commerce explosion. That shows that there's going to be a need for search and comparison shopping sites going forward because people need a way to navigate through all those sites.

Google was by far the biggest search referral source, sending 16% of retail traffic, followed by Yahoo Search, with 4.8%, and MSN Search, at 2.2%.

The retail categories benefitting most from search engine traffic were intimate apparel and accessories, house and garden, and grocery and alcohol.

Source: MediaPost

40 Million Americans Prefer the Web for Science News

40 million Americans use the internet as their primary source of news and information about science, and 87% of online users have at one time used the internet to carry out research on a scientific topic or concept.

As a primary source for science information, the internet is second only to television among the general population. For Americans with high-speed internet connections at home, the internet is as popular as TV for news and information about science. And for young adults with high-speed connections at home, the internet is the most popular source for science news and information by a 44% to 32% margin over television.

Some of the key findings by an American online survey company conducted among a sample of 2500 people include:

• 87% of online users have used the internet to look up the meaning of a scientific concept, answer a specific science question, learn more about a scientific breakthrough, help complete a school assignment, check the accuracy of a scientific fact, downloaded scientific data, or compare different or opposing scientific theories
• Two-thirds of respondents asked about stem cell research said they would first turn to the internet
• 59% asked about climate change said they would first go to the internet
• 71% of internet users say they turn to the internet for science news and information because it is convenient
• 65% say they have encountered news and information about science when they have gone online for a different reason

Users of the internet for science information also report better attitudes about the role science plays in society and higher assessments of how well they understand science. Specifically:

• 78% of those who have gotten science information online describe themselves as "very" or "somewhat" informed about new scientific discoveries
• 58% of remaining internet users says this
• 48% strongly agree that to be a strong society, the United States needs to be competitive in science
• 33% of remaining online users strongly agree with this
• 43% strongly agree that scientific research is essential to improving the quality of human lives
• 27% of remaining online users say this
• 59% of Americans have been to some sort of science museum in the past year, such as a zoo or aquarium, natural history museum, science or technology museum, or planetarium
• 49% of internet users have gone to a website whose content is devoted to science, such as the Smithsonian's website or NationalGeographic.com.
• The report also shows a relationship between the two behaviors: those who have gone to a science museum are more likely to visit science websites, and vice versa

Update by Chanelle: People's use of the internet for science information has a lot to do with the internet's convenience as a research tool, but it also connected to people's growing dependence on the internet for information of all types.