Nielsen: Online ad spend slows YoY in US

More marketers are logging on to the Internet but their spending has begun to slow. That, according to a recent Nielsen Company report, which shows that spending increased only 0.6% Year Over Year (YoY) from 2006 to 2007.

by Kristina Knight

This should not be a surprise to marketers, many of whom have noticed an overall slowdown in the US economy; some have said that the economy is in a recession. Television and newspaper advertising fared worse than online advertising efforts, with Sunday supplements increasing less than 5% and television ads increasing only about 2%.

Nielsen went on to report that there are 221 million online consumers in the US and more than three-quarters of those users were active in the month prior to their reporting period. The consumer base still seems to be more active at work (94%) than at home (69%).

One of the fastest growing areas is online gaming. Some toy companies have taken note and are creating kids toys, i.e. Webkinz or Littlest Pet Shop, which send kids online to care for their toys in a virtual realm. This trend is seeing very fast growth so far in 2008.

What this means for etailers and online marketers is that though the market is slowing, that is likely because we are nearing the tipping point. Online advertising cannot continue to grow at the rates of the past five years because there are only a finite number of businesses out there to advertise. Marketers cannot completely ignore other advertising outlets, either, so while online isn't growing at previous rates, it is encouraging that the category continues to outpace traditional categories such as newspaper and television.