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Brand ads drive internet spend up 9% reports Thomson

Internet display advertising has grown by 9% reports Thomson Intermedia in its latest media spend estimates. According to the researcher, the 12 months to March 31 2007 show an "expected"slowdown on the dramatic growth seen across 2005 and 2006 as the internet grows up as a medium.

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Market observers are forecasting total internet ad spend growth of around 25% year on year. Much of the growth of the digital ad market is believed to come from integrated solutions and partnerships with publishers.

Use of standard display formats is still growing but, increasingly, brand advertisers expect more engaging ways of holding a dialogue with consumers.

According to Thomson Intermedia, the key findings for the past 12 months are:

  • Overall UK media spend increased 4% in the year to March 31 2007 thanks to strong growth in press, direct media and internet display advertising budgets.
  • Traditional broadcast TV advertising fell 4% in the last year, radio advertising fell 9%.
  • Revenues across all three main terrestrial broadcasters fell, with ITV advertising revenues falling fastest by 11% year on year.  Their digital channels all grew by at least 50% though their scale remains insufficient to offset overall losses.
  • Internet display ad spend (excl. Search and Classified) grew 9% in the last year.
  • Press grew 7% overall in the past year.  The largest growth was in quality National newspapers. 
  • Door Drops spend exceeded Direct Mail thanks to raised investment from Retail and Finance sectors.

Sarah Jane Thomson, CEO of Thomson Intermedia, explained: "There is a strong sense of media being in transition and tremendous uncertainty about what will happen as the pace of change seems to get faster daily.

"Advertisers naturally want to stay ahead of the curve and get things right, but one fear we should see assuaged with time is of audiences fragmenting endlessly, eroding forever the critical mass traditional media once offered."

She notes that audiences are emerging in significant new ways: "Technologies are driving change enabling more cost effective communications, albeit on different terms. Several online TV services launching soon will offer commercial breaks, having signed up major commercials and media partners. Brand advertisers, who have struggled most lately, are beginning to realise the internet's potential as more consumers spend more time online and convergence of technologies removes barriers to doing business as usual."

Thomson added: "Of the top five spending sectors only Retail and Entertainment have been truly buoyant in the past year.  Retail was the only category in the top five that raised TV budgets and was equally conspicuous for increasing radio advertising investment.  Direct marketing however, was the main beneficiary of retailers' increased overall media spend. 

Retailers cut back on generic internet display advertising by 26% overall in the past year compounding the decreased rate of growth measured for overall internet display advertising.  Toiletries/Cosmetics and Travel sectors' growing affinity with direct marketing has also been at the expense of broad internet display ad spend and contributed significantly to this trend."

* Links to Thomson Intermedia's regularly updated media spend figures can be found in Brand Republic's research section

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