Online Ad Spending to Grow to $32 Billion in 2005
NEW YORK--(BUSINESS WIRE)--July 28, 1999--
Myers Group Says Revenues will Surpass Many of the Most Bullish
Predictions Made to Date
Survey of Advertising Executives on Online Advertising Provides
Insight into Trends and Opinions
As part of its first annual Survey of Advertising executives on Online Advertising, The Myers Group predicts that online ad spending will reach $32 billion in 2005, surpassing even many of the most bullish forecasts made to date.
Myers forecasts online spending for 1999 to approach $2 billion. The report anticipates a continued rapid escalation in online ad spending during 2000, a slight slowdown in growth as consolidation hits the industry in 2001, but "extraordinary growth in 2002 and beyond." The report says that ad spending across all media will total $400 billion in 2005, making online's share eight percent.
"Our extremely bullish forecast is based on results of our field research, which point to online's underlying strength as the most highly targeted, most directly measurable and most interactive medium ever," said Jack Myers, chairman and chief executive officer, The Myers Group. "Our research shows that online will undergo some growing pains, most notably caused by forces that would commoditize the business and put it in competition with other media, especially network television. But we believe strongly that marketers and their online agencies will be supportive of efforts and initiatives that focus on sponsorships, marketing partnerships and integrated marketing programs."
The survey also produced the following findings:
-- What factors do you consider in deciding to use online
advertising?
Top five among 20 listed factors:
1. Targeting, 81%
2. Brand building, 77%
3. E-commerce, 60%
4. Audience reach, 56%
5. Click rates to corporate sites, 47%
-- Demonstrating that online advertising must still overcome
obstacles to growth, a majority of respondents say they are "neither
satisfied nor dissatisfied" (28%) or "dissatisfied" (24%) with the
media performance of their online advertising campaigns. This
indicates that there is a great opportunity for improvement of
services, Myers said.
-- There is a "very significant" disparity in perception between
the big, well-branded online networks and providers (including
DoubleClick, Yahoo, America Online, 24/7) and more targeted, niche
providers. Some examples:
Rating of online sales organizations (% rating as "good," "very
good" or "excellent" in accessibility of reps, competency of reps and
overall satisfaction)-
-- average of top six organizations (DoubleClick, Yahoo, AOL,
24/7, Excite and Lycos): 36%;
-- average of all 28 sales organizations measured: 16% .
Rating of online sales organizations (% rating as "good," "very
good" or "excellent" in nine performance categories)-
-- average of top six organizations: 37%;
-- average of all 28 sales organizations: 17%.
The nine performance categories measured were: "Desirable partner
for long-term marketing partnerships;" "sales organization I can
trust;" "excellent sales management;" "accurate information;"
"thoughtful proposals;" "proactive;" "responsive;" "quality of
relationships;" "performance reporting."
Rating of 42 web sites and networks for 11 key attributes (%
rating as "good," "very good" or "excellent")-
-- average of top six sites and networks: 31%;
-- average of all 42 sites and networks: 10%.
The 11 key attributes measured were: "excellent content
associations;" "well-promoted site;" "is a must-buy;" "e-commerce
opportunities;" "transaction capabilities;" "audience reach;"
"targeted demographics;" "very cost efficient;" "excellent
administration;" "marketing/promotion opportunities;" "research
support."
-- Media Planning/Buying Tools Currently in Use:
Banner Testing, 76%
Effectiveness Testing, 61%
Media Performance Auditing, 56%
Sales Generation Measures, 37%
Proprietary Consumer Research, 36%
Geographic Targeting, 34%
Reach Optimization, 28%
-- "Integrated media packages that include television, radio and
print with online opportunities are important to me"
Yes: 49%
No: 36%
Don't Know:15%
Myers pointed out that, consistent with other research they have
conducted in recent years, a strong trend exists supporting a need for
all media sales organizations to develop value-based marketing
capabilities.
-- "My company is currently investing in research to measure the
effectiveness of our online advertising"
Yes: 65%
No: 32%
Don't Know: 3%
-- "Marketers and agencies are seeking to build longer term, more
marketing oriented relationships with online media companies"
Yes: 64%
No: 20%
Don't Know: 17%
-- "The integration of advertising, promotion and commerce is a
positive trend and I will place greater value on online media
opportunities that integrate them, and organizations that can
coordinate and service them"
Yes: 92%
No: 3%
Don't Know: 5%
-- Respondents to an earlier Myers study (1999 Survey of Cable Operator Executives) predicted that cable modem penetration would stand at 3% in 2000 and 15% in 2003. They forecasted digital penetration reaching levels of 8% and 42% by 2000 and 2003, respectively.
The Survey of Advertising Executives on Online Advertising was underwritten by the online industry and sanctioned by the Internet Advertising Bureau (IAB). Results are based on a self-administered questionnaire completed in March and April 1999 by 108 respondents. Sixty-two percent of respondents were marketer executives, 38 % were agency executives. Future studies will be conducted at approximately six-month intervals, with the next questionnaire to be fielded later this summer.
The Myers Group is the leading specialist in competitive market positioning and revenue development capabilities for the media industry. The Myers Group also provides counsel to major international advertisers and advertising agencies on the future of their relationships with media companies.
The Myers Group publishes The Myers Report, a daily fax newsletter on media and advertising issues, as well as insightful reports on a wide variety of management topics.
NOTE: A copy of Survey of Advertising Executives on Online Advertising is available on request.
CONTACT: Braff Communications
Mark Braff, 201-797-8182 |
