Online advertising is expected to perform strongly in 2005 with traditional advertisers due to increase their spending on the medium, a new survey has found. In addition, banner advertising is forecast to make a comeback this year.
US-based Advertising.com surveyed publishers about their advertising business expectations for 2005. The results pointed to a positive outlook for the sector.
Traditional advertisers’ online spending is predicted to grow 20pc compared with 2004. Despite this increased involvement by so-called traditional sectors such as pharmaceutical, automotive, travel and entertainment, web-based advertisers will still spend more online overall, the survey found.
Scott Ferber, chief executive officer of Advertising.com, said that traditional advertisers are starting to perceive online advertising as more “mainstream”. “Both web-based and traditional advertisers are becoming more comfortable using the web for direct-response as well as branding campaigns. And newer, more sophisticated targeting strategies and technologies are enabling them to measure and optimise the effectiveness of those campaigns better than ever before.”
More than 15pc of publishers said that traditional banner ads would lead revenue growth, more than double the amount who said this would increase in 2004. Key revenue growth areas this year will be text links, large rectangle and small banner ads.
Banner ad value is expected to increase because of the format’s small size which is said to cause less clutter on websites. Larger ad types such as rectangles are also expected to increase in revenue over the coming year.
Close to 17pc of respondents said that pop-up ads would generate the most revenue for their sites this year, but a smaller percentage of publishers said this would be the main revenue generator in 2005 compared to last year.
Rich media, streaming content and behavioural targeting were three further areas cited by survey respondents as having an impact on 2005 ad revenue; 70pc of those surveyed support rich media ads and expect these to have the greatest impact on 2005 revenues. It is a format that is believed to be more effective at delivering an advertiser’s message than image files.
Streaming media was also mentioned frequently as having the potential to positively impact revenues. However, not all online publishers feel they will be able to take advantage of these channels because of resource and development requirements.
By Gordon Smith