Eyeballs are valuable again
In today’s New York Times (6/26/06, Bob Tedeschi talks about about the boom in online advertising. In our latest Blackfriars report, “Marketing 2006: Q2 Bounces Back", we began to discuss this trend as advertising began to show some strength aided mostly by the electronic component.
Advertising has been in a slow downward spiral for the past two years. In 2004, advertising was almost one-third of all budgets, where in the first quarter of 2006, it had dropped to 23%. Of that 23%, the offline component was 13%, while online at 10%. But while executives had planned to spend 23% of their budgets on advertising in the first quarter, the actual spend was 34%, the highest in a year. Both traditional media and online climbed 5 points with online spend at 15%.
As we look at Q2 forecasts, budgets remain in line with the two prior years, but spending allocations within the marketing mix have shifted. Traditional advertising dollars continue to decline, that that decline is offset by 37% of marketing budgets moving to electronic and non-traditional media spending.
So what? What this says to us is that the marketing heat in 2006 is not going to be in traditional media. Look for most of the action to in the electronic and non-traditional arenas as companies continue to shift their dollars. The bottom line: we project that on-line ad budgets will surpass traditional advertising as a percentage of marketing budgets by the end of the year.
Advertising has been in a slow downward spiral for the past two years. In 2004, advertising was almost one-third of all budgets, where in the first quarter of 2006, it had dropped to 23%. Of that 23%, the offline component was 13%, while online at 10%. But while executives had planned to spend 23% of their budgets on advertising in the first quarter, the actual spend was 34%, the highest in a year. Both traditional media and online climbed 5 points with online spend at 15%.
As we look at Q2 forecasts, budgets remain in line with the two prior years, but spending allocations within the marketing mix have shifted. Traditional advertising dollars continue to decline, that that decline is offset by 37% of marketing budgets moving to electronic and non-traditional media spending.
So what? What this says to us is that the marketing heat in 2006 is not going to be in traditional media. Look for most of the action to in the electronic and non-traditional arenas as companies continue to shift their dollars. The bottom line: we project that on-line ad budgets will surpass traditional advertising as a percentage of marketing budgets by the end of the year.
