The Interactive Advertising Bureau (IAB) and Pricewaterhouse Coopers (PwC) have released the Internet Advertising Revenue Report including final numbers for Q3, Q4, and full year 2005. The report states that Search, Classifieds, Display, and Rich Media all continue to grow at a healthy rate. Overall internet advertising revenues (U.S.) for 2005 totaled $12.5 billion, a new annual record exceeding 2004 by 30%. Q4 2005 internet advertising revenues totaled a record $3.6 billion, representing a 34% increase over same period in 2004.
“Interactive Advertising continues to experience tremendous growth as marketers experience its overall effectiveness in building brands and delivering online and offline sales,” said Greg Stuart, CEO, IAB. “We are confident that this growth trend will continue as more marketers find Interactive to be an imperative and additional platforms including broadband video, gaming, iPTV and others continue to emerge as real opportunities.”
“The Internet continues to be a vibrant and ever-changing channel, providing advertisers with broad offerings that enable them to promote their brands using a highly cost effective platform,” says David Silverman, Partner, Assurance, PricewaterhouseCoopers. “Continued strong growth in online advertising documents that an increasing number of advertisers and marketers see the Internet is an essential brand-building component in their media planning,” adds Peter Petrusky, Director, Advisory, PricewaterhouseCoopers. (A copy of the full report is available at http://www.iab.net/resources/ad_revenue.asp)
DVR Commercial Skipping Could Threaten billions of $ in TV Advertising
According to new Jupiter Research report, “The DVR Dilemma: Managing Consumer Behavior,” 53 percent of online Digital Video Recorder (DVR) subscribers used their DVRs to skip commercials. If these DVR households skip commercials 100 percent of the time, the cable and broadcast TV advertising revenue potentially at risk in 2006 would be $8 billion of the $74 billion TV advertising Market. DVR users who skipped commercials report watching an average of 18 hours of television per week – not significantly more than viewed in non-DVR homes.
“Claims that DVRs tend to increase television viewing are not true across the board,” said Todd Chanko, Analyst at Jupiter Research and author of the report. “Only for those homes that record and watch a show the same day or week does DVR use boost overall TV watching, from 17 hours a week for non-DVR homes to 20 hours a week.”
Jupiter Research recommends that television networks and advertisers rethink programming and advertising strategies to cope with how DVRs are being used.
“Current efforts by certain networks to charge for prime-time reruns via DVR technology do little to boost revenue and almost serve to penalize DVR users who forgot to properly program their unit,” said David Schatsky, President of JupiterKagan Research. “The $8 billion segment of cable and broadband TV advertising revenues potentially at risk due to DVR commercial skipping is not a foregone conclusion, but reworking ads to leverage the unique DVR experience could open new avenues of creativity and relationships with viewers.”
Complete findings of the report are available to Jupiter Research clients at www.jupiterresearch.com. (For information on Jupiter Research’s Television & Filmed Entertainment research offerings visit www.jupiterresearch.com)
Consumers and Online Advertising
In a growing sign of consumers’ evolving attitudes toward online advertising, a new study sponsored by Revenue Science and conducted by the Ponemon Institute showed that a majority of consumers prefer advertising based on their individual interests. Specifically, 63 percent of those surveyed said that Internet marketers should “always” understand their interests prior to sending them advertising; while 55 percent stated that online ads of interest to them “improves” or “greatly improves” their overall online experience.
The Ponemon Institute, a research institute dedicated to privacy management practices in business and government, polled more than 1,700 people to learn about consumers’ motivations and preferences in receiving online advertising, as well as how knowledge about cookies impacted these issues.
“This study shows that not only do consumers prefer relevant advertising, but also that advertisers should consider behavioral targeting methods for providing consumers with more relevant ads as long as privacy and anonymity are assured,” said Dr. Larry Ponemon, founder and chairman of Ponemon Institute.
(For more information, visit www.ponemon.org)
