Internet Ad Spend Growth Surpasses TV

NEW YORK Online ad expenditures outpaced TV in terms of growth last year as large traditional advertisers began to spend more on the Internet, according to a joint report released today by Nielsen/NetRatings and DoubleClick.

The study, which augmented DoubleClick’s ad-serving data with online and offline spending reports from Nielsen Monitor-Plus and Nielsen/NetRatings AdRelevance, respectively, found that Web ad expenditures in the first quarter of 2003 rose 11 percent, versus TV’s, which increased 3 percent. Ad spending growth slowed for the Internet by the third quarter to 6 percent, but still surpassed TV’s 3.5 percent boost.

According to the Interactive Advertising Bureau, online ad spending surged 20 percent last year to $7.2 billion.

Automotive and telecommunications marketers contributed to the rise, each category upping their ad impressions on the Web in 2003 over the year before by 75 percent and 32 percent, respectively. The telecom sector’s increased investment in the Internet was reflected by SBC Communications, whose year-over-year online ad spend rose 168 percent, AT&T Wireless (21 percent) and Verizon Communications (5 percent).

The financial services category also was well represented by Ameritrade, whose online ad expenditures grew 23 percent, BankOne (12 percent), Scottrade (27 percent), Ameriquest (353 percent), Citigroup (4 percent) and LowerMyBills (775 percent). (Of course, some of the companies with notable growth were working off of a small base.)

The report also found that the Internet now accounts for 49 percent of ad spending done by business-proposition and employment-recruiting companies and 15 percent of that done by travel companies.

“Last year marked the first time that large traditional advertisers began to spend more online,” said Charles Buchwalter, vice president of analytics at Nielsen/NetRatings, a part of Adweek parent VNU. “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.”