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Online vs. Traditional Media

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According to eMarketer, “the nation’s largest advertisers are shifting more of their budgets from traditional media to the internet. Among Advertising Age’s ‘100 Leading National Advertisers,’ 69 allocated a smaller share of their total ad budgets toward the four traditional measured media (TV, radio, newspapers and magazines) in 2006 than in 2005. 58 of those advertisers both decreased their spending share on the four traditional media and increased the share going to the internet.”

eMarketer further reports that while the top 100 advertisers spent nearly $230 million less, combined, on the traditional four media in 2006 compared with 2005, they spent a combined $558 million more on internet advertising.

Search, display and classified ads account for the largest advertising share of Internet spending, according to eMarketer’s projections for the 2006-2011 period. eMarketer reports, “Paid search’s share of online ad spend will continue to hover in the 40 percent range through 2011. Display ads (such as static banners) will generate about 20 percent of internet ad revenues through the decade.”

David Hallerman, author of the report, explains that the economic downturn will affect online advertising much less than traditional media advertising. “In contrast to the 26.7 percent growth projected for internet advertising in 2007, total media ad spending will increase only 2.1 percent.”

eMarketer further explained that the reduced spending due to economic crunch will open the doors for much more paid search because of its high accountability, as opposed to display ads, or even moreso, traditional media. This trend will be especially visible in the mortgage industry.

Source: eMarketer Report, 2008

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