Report shows rebound for online advertising in 2003

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Internet advertising will see a rebound in 2003 as more traditional marketers increase their online spending, according to an eMarketer report released last week. The report, titled "Interactive Marketing: Stats, Strategies and Trends," projected online advertising will reach $6.7 billion in 2003, up 5% from expected spending of $6.4 billion this year. By 2005, online advertising is predicted to reach $8.1 billion.

"More traditional advertisers are willing to give up a higher percentage [of their ad budgets] toward online than in the past," said David Hallerman, senior analyst at eMarketer Inc. "This is being driven by a move to use online advertising for branding and not just direct response."

Hallerman said traditional advertisers are using the Internet for branding because of advances in rich media technologies that create more engaging experiences for users, and because of proof that online advertising is effective at branding. Over the past year, the Interactive Advertising Bureau published several studies in conjunction with major advertisers that showed the effectiveness of online advertising in improving brand awareness and other brand metrics.

For b-to-b marketers in particular, keyword search will continue to show promise because of its ability to narrowly target an advertiser’s message to users looking for specific information, Hallerman said.

He pointed to a report from the IAB and PricewaterhouseCoopers showing that spending on keyword search totaled $301.9 million in 2001, up 144% from 2000. For the first half of 2002, spending on keyword search totaled $237.6 million.

Another important trend is the use of interactive media to build long-term relationships with customers, Hallerman said. "Most
b-to-b marketing involves long-term relationships, longer purchase cycles and larger purchases," he said, pointing to the use of permission-based e-mail to improve customer relationships.

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