CMR: Internet Ad Market Fell in 2002

All in all, the advertising market held up quite well in 2002, according to figures released Monday by CMR/TNS Media Intelligence. Internet advertising, however, had another tough year overall.

According to the ad measurement firm, the advertising market grew 4.3 percent, finishing the year with $117.3 billion in spending. The positive results were a result of a robust upfront market for TV ads and the midterm elections and holiday spending.

“Despite geopolitical and economic uncertainties, the marketplace outperformed our expectations for the year,” said Steven Fredericks, CMR/TNS Media Intelligence’s chief executive.

The Internet, on the other hand, decreased for the third straight year, falling 12 percent to $5.7 billion. At that level, Internet spending was roughly equal to that of local radio and below B-to-B print magazine spending.

While the online ad industry suffered another bleak year in 2002, the sector saw some bright signs as the year wore on. The Interactive Advertising Bureau said the online advertising market began to grow again in the third quarter, and a variety of forecasters predict robust growth will return to the industry in 2003. CMR itself has forecast 7.4 percent growth in 2003.

Other positive signs have been the robust growth reports from newspaper publishers’ online arms, as well as solid results from companies like Yahoo and the meteoric rise of the paid-listings business.

Like all advertising compilations and forecasts, CMR’s numbers are somewhat skewed by the advertising meltdown at AOL, where ad revenues declined by $372 million in 2002. That alone would represent nearly half of the $778 million decline CMR measured.

Spot TV led the ad market’s growth, rising 14 percent to $16.4 billion. Network TV grew 7 percent to top $20 billion. Also, local newspapers were also up, with spending rising 9 percent.

Advertisers showed increasing interest in Hispanics, which as a group surpassed blacks at the largest minority group in the country. CMR gauged Spanish-language network TV spending increasing by 20 percent to $1.9 billion.

Local advertising outperformed national, growing 11 percent to $42 billion, while national advertising rose slightly to $75.3 billion.

The strength of local advertising was led by strong spending in such categories as automotive, which pushed zero-percent financing deals all year, as well as telecommunications and restaurants.