Ad Execs See Greater Shift to Online

NEW YORK Ad industry executives believe their industry is in the throes of rapid change, which is accelerating the shift of media budgets to online ads, according to a new survey.

A study by the American Advertising Federation found industry leaders concerned about the fallout from consumer adoption of digital video recorders, with 80 percent asserting DVRs would have an impact on TV advertising. Over half said they either changed or planned to change their ad plans as a result of the so-called TiVo effect.

Online advertising appears to be the biggest beneficiary, as respondents said the amount of media budgets devoted to Internet ads would rise nearly 33 percent in 2006 to represent about 19 percent of spending.

The AAF and Atlantic Media surveyed 75 executives from agencies, media outlets and marketers. More than 80 percent have worked in the industry more than 15 years.

The hand-wringing over DVRs, however, does not translate into widespread belief that the traditional TV ad model is withering away: 22 percent agreed DVRs are changing the TV advertising paradigm, a 1 percent increase from last year. About 58 percent said the 30-second spot would live on, but ad-skipping technology would lead to more product placements, sponsorships and other formats.

Similarly, ad execs were hesitant to fully embrace the newest forms of interactive advertising. On a scale of one to five, blogs (2.9), podcasts (2.6) and Web-enabled cell phones (2.8) received mixed scores.