DoubleClick and Nielsen//NetRatings Release Inaugural Year in Online Advertising Report
"All indicators support that 2003 was the year online advertising rebounded," said Doug Knopper, Senior Vice President and General Manager, Advertiser & Publisher Solutions at DoubleClick. "The online medium outpaced certain categories of traditional media in terms of spending growth; volume is up across categories and Fortune 500 companies renewed their commitment to interactive marketing with steady investment. In terms of driving the space forward, search and rich media are the strongest contenders, and the industry is following those performance metrics closely and with great optimism."
"Last year marked the first time that large traditional advertisers began to spend more online," said Charles Buchwalter, vice president of client analytics, Nielsen//NetRatings. "While the online medium is still relatively young, the growth of broadband paints a promising picture for online ads, as advertisers recognize that people are spending more time online and consuming more online media."
Online Ad Rebounding
Nielsen//NetRatings AdRelevance reported that online advertising (not including search) rose to highest levels of the year with 280 billion impressions in Q4. DoubleClick data, which represents the top publishers, marketers and advertising agencies that use third party ad serving, showed high levels of growth: from Q1 to Q4, DoubleClick volume was up 49%. Finally, the Internet Advertising Bureau (IAB) reported that ad spending grew 20% year-over-year to $7.2 billion.
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According to Nielsen Monitor Plus data and IAB numbers for Q1 2003 vs. Q1 2002, online spending growth (+11.3%) outpaced spot TV (+3%) and outdoor (+5.2%), as well as network TV (-12.1 %). Growth slowed for online by Q3 03 to +5.9% over Q3 02, but still outpaced TV growth (+3.5%).
Top Users by Category
Automotive, a category which started with a small base of spend, had the largest growth on an impression basis year-over-year (+74.9%). Telecommunications was a big focus for online advertising as the FCC portability ruling inspired a wealth of service offerings. It came in third, at 31.2% growth, year-over-year, on an impression basis. Retail is another category dramatically impacted by online and 8.7% of total spend is devoted to the medium. However it was the only category to show a dramatic decrease in impressions.
Online now accounts for 48.5% of business proposition and employment recruiting ad spend. In travel, 15.4% of all spending is now online. Business and consumer services (which includes credit cards and financial services) devoted more advertising to online than to newspaper, magazines or radio. This category was clearly driven by the movement towards self-directed investing, online banking and low interest rates. In addition, a very useful indicator of the health of online media is growth in usage by Fortune 500 companies. Their usage was relatively stable during the year at an average of 28.5% of all online advertising.
Top Users by Marketers
While the top 25 marketers in 2002 was heavily weighted towards the surviving "dot-coms:" Amazon.com, AOL, eDiets, X-10 Wireless, eBay, etc., the top 25 list of 2003 paints a different picture. X-10 has dropped off entirely, while others have decreased spending. Strong online companies like eBay and Amazon.com have likely tapered off banner advertising because they have already built their brands. The telecom and financial services resurgence that drove increased online marketing investment in those sectors was reflected by SBC (+168.1% year over year), AT&T Wireless (+21.3%) and Verizon (+5.6%) all made the top 25 list as did Ameritrade (+22.8%), BankOne (11.9%), Scottrade (+26.7%), Ameriquest (+352.7%), Citigroup (+3.8%) and LowerMyBills.com (+775%).
The Year of Rich Media -- But What About the Pop-Up?
Nielsen//NetRatings AdRelevance estimates 223% rich media growth Q1 - Q4 to 17.4% of all ads. Within the DoubleClick's system, rich media grew to nearly 40% (39.7%) of all ads served by Q4(1). In terms of performance, DoubleClick's new Audience Interaction Metrics, which measure interaction with rich media ads served through DART Motif(SM), showed initial strong results. In Q4, the average amount of time a Motif ad displayed in a user's browser was 41.9 seconds and the average amount of time a user interacted with the ad was 21.9 seconds. Figures like these will help marketers make comparisons with broadcast media where a typical unit can engage a consumer for 30 seconds.
The Fortune 500 voted in favor of rich media during the year, accounting for 45.5% of all rich media advertising in Q1 and 38.8% in Q4. Cell phones led this category: SBC at 2.2 billion impressions, followed by AT&T Wireless at 1.9 billion impressions.
Pop-ups and pop-unders, which DoubleClick categorizes as a subset of rich media, are perhaps the most controversial form of online advertising. Not surprisingly, their usage did not grow dramatically in 2003. Within DoubleClick's system they account for under two percent of all ads served, and AdRelevance shows them as fluctuating between five and seven percent of the total market. The big brand advertisers however continue to shy away from them; Fortune 500 share of pop-up advertising is lower than industry average at 3% of all Fortune 500 advertising.
Search: Category Driven
The other growth story of 2003 was search. However, while search is clearly "hot" among online advertisers, it should be noted that its impact is category relevant. An annual survey sponsored by DoubleClick (Touchpoints II, March 2004) of over 2,000 consumers who have made purchases of particular types of products in the last six months, showed that their usage of search varied by product type. Of those who visited websites to learn about products and services, 58% of those searching for consumer electronics used a search engine and 53% of those looking for prescription drugs did so. But for products like telecommunications, only 38% did so. For credit cards and banking, only 20% did so. In categories with lower usage of search, consumers were more likely to guess URLs, probably because these categories have more established brand or product names.
Methodology
The full Year in Online Advertising Report, including methodology, may be requested through DoubleClick public relations at jconnorton@doubleclick.net.
About DoubleClick Inc.
DoubleClick is a provider of tools for advertisers, direct marketers and web publishers to plan, execute and analyze their marketing programs. DoubleClick's online advertising, email marketing and database marketing solutions help clients yield the highest return on their marketing dollar. In addition, the company's marketing analytics tools help clients measure performance within and across channels. DoubleClick Inc. has global headquarters in New York City and maintains 19 offices around the world.
About Nielsen//NetRatings
Nielsen//NetRatings is the global standard for Internet audience measurement and analysis and is the industry's premier source for online advertising intelligence with its NetView, AdRelevance, @Plan, WebRF, LemonAd, MegaPanel and SiteCensus services. Covering 70 percent of the world's Internet usage, the Nielsen//NetRatings services offer syndicated Internet and digital media research reports and custom-tailored data to help companies gain valuable insight into their business.
Source: DoubleClick Inc.
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