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International: Non-search online ad revenue rises

13-November-2004
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International: Non-search online ad revenue rises

While the soaring revenues of search-based Internet advertising have received the bulk of media coverage of late, a new eMarketer study indicates that other forms of online advertising are also doing well.

AdTech Conference

Prepared for release at the three-day AdTech conference that opens at the Hilton New York today, the eMarketer report predicts that display, sponsorship and rich-media ad revenues will increase by 10% throughout 2004 and by 21% in 2005.

"Search [advertising] is important, it's effective, but it disguises the entire story," said David Hallerman, senior analyst at the online marketing research firm.

Non-search ads are projected to take in $3.3 billion this year and $4 billion next year.

Search-based ad revenues, meanwhile, are up 55% and are expected to total $3.9 billion this year.

$9.4 billion 2004 total

According to the eMarketer report, all forms of online advertising revenue will hit $9.4 billion this year and more than double that growth in 2005.

"More brands are realizing they need to devote a share of advertising to the Web," Mr. Hallerman said.

One reason that advertising is becoming more effective online is the rapidly spreading use of broadband connections that make the Internet experience more engaging for consumers.

Impact of broadband use

"When people have broadband, they dip in and out or not, almost the way they turn on and off a TV or a radio -- and that makes for much more effective advertising," Mr. Hallerman pointed out. "They don't have to be doing a search to get advertising."

Mr. Hallerman suggested that another reason for the continuing rise in non-search online advertising is that the staff members at ad agencies and marketing companies, who were 19 in 1996, are now in their late 20s and assuming more responsibilities on the job. "They take the Internet for granted," he said, with the inclusion of online ad components being a natural part of their thinking.

Source: Adage

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