Big Brands Slower to Convert Online

Online advertising is growing at faster than ever rates, but the growth could be even larger, according to some experts. That´s because some of the big brands – and big ad budgets - are increasing their online ad budget at a very slow pace. Conversely, smaller companies and less well known brands are increasing online spending at a much faster rate.

by Kristina Knight

According to new data from TNS Media Intelligence, the first 9 months of 2006 saw advertisers spend $7.2 billion on online advertising – specifically display ads. That is about $1 billion more than they spent during the first 9 months of 2005, and 6.6% of the total ad spend for the first 9 months of 2006.

The TNS figures don’t factor in paid search, which is growing even more rapidly than online display ads. Display ad budgets are growing at about 18%. Paid search is growing at roughly 30%.

Steven Fredericks, president and CEO of TNS Media Intelligence said (via MediaPost), “Because advertising on the Internet is cheaper than traditional media, some of the second-tier advertisers who are more concerned about every dollar in their ad budget may be spending more online."

The breakdown for spending in 2006 is television (43.5%), magazines (19.8%), newspapers (18.7%), radio (7.5%), online (6.6%), other (3.9%).