Masha Geller turns statistician this week as she examines numerous studies and forecasts announced this week. Plus: how online is beating up on offline.
As the advertising industry geared up for the festivities of the iMedia Brand Summit, Advertising Week, OMMA, WOMMA and host of other conferences next week, I thought there would be a dearth of things to report on, but I was wrong. Just like there is no calm before the storm that’s approaching Houston, with thousands of people on the move to higher elevations and calmer winds, there will be no shortage of things to discuss at next week’s gatherings. All sorts of glowing predictions are pouring in.
I know I said I was going to stay away from forecasts, but my job is to summarize the week’s happenings and there was little else happening this week. You can be sure I’ll be looking over all of the following in the upcoming months and years and grading the responsible parties according to the clarity of their crystal balls. For now, here goes:
One of the big discussion topics next week is sure to be local advertising, if only due to Jupiter’s release on Wednesday, which said that U.S. spending for online local advertising will grow 26 percent to $3.2 billion in 2005, and then 11 percent compounded annually, to $5.3 billion in 2010. According to the report, classifieds will continue to comprise almost 70 percent of that total throughout the forecast period, while selling online display or search ads to local business services will remain an uphill battle.
As for search, Jupiter, in another report, predicted that total spending on paid search ads would reach about $7.5 billion by 2010, eclipsing display ads. Last year, paid search totaled about $4.2 billion (34 percent of total online ad spend), but Jupiter predicts it to catch up with display before the end of the decade. Jupiter also predicts cost-per-click to increase from the 2004 average of $.39 to $.58 by 2010.
That’s not the only interactive sector expected to keep growing. Online retail sales in the last week of August -- generally a slow time -- increased 26 percent from the same time last year, reaching $1.47 billion, according to comScore. Travel sales for the week were also up 23 percent, reaching $1.25 billion.
Online impressions were a similar story. Nielsen//NetRatings says online display impressions in August reached 112.1 billion -- nearly nine percent more than in July. That’s the fifth straight month of growth. Advertisers served 102.9 billion impressions in July -- compared with 97.1 billion in June, 93.1 billion in May, and 91.4 billion in April.
All this while Americans’ broadband adoption is slowing. According to Pew Internet & American Life Project, during the first six months of this year, 53 percent of home internet users had a broadband connection, up from 50 percent during the prior six months -- a growth rate much slower than in previous periods.
Elsewhere on the web, online is salting the wounds of traditional media.
Procter & Gamble’s Prilosec OTC sweepstakes this week took over the home pages of Yahoo! and ESPN.com in their largest online buy ever. They’re not saying exactly how much they’re spending, but it’s obviously a departure in the right direction for the company, which last year only spent $12.2 million across all its brands on interactive media. Not to mention that this comes when the newspaper and radio industries are reporting less than stellar growth and Nielsen’s People Meter is scaring the wits out of broadcasters by shooting holes through the unbelievable audience numbers they’ve grown used to over the last many decades.
On the emerging technologies front, AOL is raising the stakes in the VoIP craze, announcing on Tuesday that it will add computer-to-phone telephone service to its AIM program and call it AIM Talk Plus. So far, only computer-to-computer calls have been offered by the likes of GoogleTalk, Yahoo! and MSN. AOL's AIM program already rules the instant messaging roost with 30.9 million visitors in July and 23 million AOL users who use the service for AOL members only. MSN and Yahoo! messengers follow with 23.2 million and 21.6 million users in July, according to comScore. This, of course, follows eBay’s acquisition of Skype last week for the ungodly sum of up to $4.1 billion.
Speaking of emerging technologies, Really Simple Syndication (RSS) is making more waves every day. New research from Nielsen/NetRatings says that RSS aficionados are a very devoted market, most visiting news sites roughly three times as often as the average web user. Researchers found that RSS users visit an average of 10.6 news sites each month compared to just 3.4 news sites for non-users. The study also found RSS users are mostly male and are, surprisingly, older than the typical early-adopter. Interestingly enough, 83 percent of respondents were unaware that they were using RSS technology.
And speaking of news, Katrina may have shut down the New Orleans Time-Picayune printing presses, but news websites did exceptionally well. Traffic to Nola.com began skyrocketing on August 27, 2005 and peaked on September 1, with its market share of total U.S. internet visits up 1,133 percent versus the seven-day average before the escalation began.
And that will be quite enough math for one day, wouldn’t you agree?
Enjoy next week’s events and safe travels!
iMedia editor-at-large Masha Geller is the founder of interactive marketing and corporate communications consultancy Geller Public Relations in New York. She has been covering the interactive advertising industry since 1999 as the former editor in chief of MediaPost.com, and is a widely-published thought leader in the interactive arena.