US online adspend ended 2004 poorly, taking in just $648 million in December, confirming industry predictions of a slow but steady 2005 in terms of advertising expenditure.
The new estimates, released yesterday by online intelligence experts AdZone Research, reveal that internet adspend for January 2004 totalled $826 million, and then dropped dramatically for December to $648 million. The study pinpointed August as the low point of 2004, taking just $611 million in spending.
This new data confirms key industry prognosticators who predict that the advertising market will continue to recover in 2005, albeit at a slower rate than in 2004. As 2005 will not have the added affects of the Olympics and Presidential elections, advertising expenditure growth is expected to be slow and steady(see Universal McCann Predicts Positive Outlook For 2005). Much of 2005’s expected growth however, has been partly attributed to an anticipated boost from online advertising.
Independent media communications specialist, Carat estimates that online adspend will rise by 38% in the coming year, this is echoed by media commentary group, Jack Myers with 30% rise. Universal McCann has forecast an upturn of 25%, while analysts Merrill Lynch were slightly more conservative, estimating a 19.4% growth rate in 2005(see Online Advertising Breaking Records).
However, the new data from Adzone, indicates a slower growth rate for the beginning of 2005 than initial expectations. The research reveals that technology marketers continued to lead other online advertisers in December, spending roughly $148 million for over 17.6 billion impressions, compared with October when tech marketers spent $188 million for around 17 billion web impressions.
The second biggest online spenders identified by the study were businesses, such as online classified companies, advertising agencies, and trade show marketers. As a group they bought about 8.9 billion impressions for over $100 million.
Retail merchants were the next at 5.5 billion impressions for $73.3 million, while banks, mortgage companies, and other financial services providers came in fourth, at 5.3 billion impressions for just over $70 million.
Despite December’s slow adspend, online advertising is continuing to grow in force, with web portal, Yahoo!, announcing that its’ profits almost doubled in the last quarter of 2004, making $143.2 million (£143.2 million)(see Online Advertising Breaking Records).
Worldwide, Yahoo! and Google are the biggest online advertising companies, with Yahoo! reporting a 220% rise in revenue from Q1 2003 to Q1 2004 and Google experiencing a 130% increase for the same period.
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