Dot-Coms Return Ad Dollars to the Web

Spending on online advertising, excluding search, increased 11.5 percent during the first nine months of 2005, according to a report released by TNS Marketing Intelligence.

Internet display ads accounted for $6.1 billion of a total $104.1 billion spent on all advertising over the first three quarters of the year. Online is up from $5.4 billion for the same period last year.

The report attributes growth to blue-chip advertisers moving budgets to the Web and resurgent spending by dot-com brands. “For the first time since the bust in 2001, dot-coms have become the majority share of Internet spending,” TNS Media Intelligence president and CEO Steven Fredericks told ClickZ News.

Smaller advertisers continue to put dollars into online, the report found. “I think some of the smaller advertisers are already there, mainly because it’s less expensive to advertise on the Internet than traditional advertising,” said Fredericks. “Clearly ROI is a major reason why we think smaller advertisers will be more prevalent on the Internet.”

Two factors resulted in a slower rate of growth in advertising, as a whole, as compared to 2004. Last year, the Olympics and elections increased dollars spent on advertising. This year, because of hurricanes Katrina and Rita, local media expenditures were around $15 million to $20 million less than expected. Fredericks sees these factors extended to spending on the Web.

“Even though we’re seeing the top 50 advertisers as a group shifting more money [to online], the total budget is still lagging the online average,” said Fredericks.

Expenditures for all media for the first nine months of 2005 amounted to $104.1 billion; a three percent increase over the same period in 2004.