Online Advertising to Double By 2007

Jeff Berg
WASHINGTON — Online advertising revenue is expected to double within the next two years, according to a new survey by the American Advertising Federation.

“Online advertising is not only respectable again but also making significant inroads in the media mix,” the report states.

Conducted among 121 leading advertisers, the second annual AAF Survey of Industry Leaders on Advertising Trends indicated that online advertising, currently at an average of 8.35 percent of all media spending, is expected to soar to 17 percent by 2007.

Over the last three years, average spending on online advertisements rose about 3 percent.

“Far from the over-hyped promises of the late ‘90s, there is now greater clarity about the real benefits of online, including its ability to complement and enhance the use of traditional media and its precision targeting,” the survey states.

Currently, about 17 percent of respondents said that they used no online advertising, dropping nearly 7 percent from 2001. That number is expected to drop to around 8 percent by 2007.

Over half of the surveyed advertisers were opposed to spyware and adware-type marketing campaigns, with 41 percent saying they strongly opposed those type of tactics. No respondents said they were strongly supportive of adware or spyware.

The top benefits of online advertising, according to those surveyed, were its ability to complement and enhance traditional media, and its ability to precisely target fragmented audiences.

The study also ranked the media blitz surrounding the Apple iPod the most successful advertising campaign of 2003-2004.