With ad research as our focus this month, I’ve grabbed a handful of findings from press materials supplied by New York-based DoubleClick Inc. and Nielsen//NetRatings on their joint Year in Online Advertising Report for 2003.

For the report, DoubleClick supplemented its own ad-serving data with data from Nielsen Monitor-Plus (measuring offline media spending) and Nielsen//NetRatings AdRelevance (measuring online spending) to paint a fuller picture of the relative growth of ad spending both in aggregate and by industry segments.

— JR

Nielsen//NetRatings AdRelevance reported that online advertising (not including search) rose to the highest levels of the year, with 280 billion impressions in Q4. DoubleClick data, which represents publishers, marketers and advertising agencies that use third-party ad serving, showed high levels of growth: from Q1 to Q4, DoubleClick volume was up 49 percent. The Internet Advertising Bureau (IAB) reported that ad spending grew 20 percent year-over-year to $7.2 billion.

“All indicators support that 2003 was the year online advertising rebounded,” says Doug Knopper, senior vice president and general manager, advertiser and publisher solutions at DoubleClick. “The online medium outpaced certain categories of traditional media in terms of spending growth; volume is up across categories and Fortune 500 companies renewed their commitment to interactive marketing with steady investment. In terms of driving the space forward, search and rich media are the strongest contenders, and the industry is following those performance metrics closely and with great optimism.”

According to Nielsen Monitor Plus data and IAB numbers for Q1 2003 vs. Q1 2002, online spending growth (+11.3 percent) outpaced spot TV (+3 percent) and outdoor (+5.2 percent), as well as network TV (-12.1 percent). Growth slowed for online by Q3 03 to +5.9 percent over Q3 02, but still outpaced TV growth (+3.5 percent).

Automotive had the largest growth on an impression basis year-over-year (+74.9 percent). Telecommunications was a big focus for online advertising as the FCC portability ruling inspired a wealth of service offerings. It came in third, at 31.2 percent growth, year-over-year, on an impression basis. Retail is another category dramatically impacted by online and 8.7 percent of total spend is devoted to the medium. However it was the only category to show a dramatic decrease in impressions.

Online now accounts for 48.5 percent of business proposition and employment recruiting ad spend. In travel, 15.4 percent of all spending is now online. Business and consumer services (which includes credit cards and financial services) devoted more advertising to online than to newspaper, magazines or radio. This category was clearly driven by the movement towards self-directed investing, online banking and low interest rates. In addition, a very useful indicator of the health of online media is growth in usage by Fortune 500 companies. Their usage was relatively stable during the year at an average of 28.5 percent of all online advertising.

The list of top 25 marketers in 2002 was heavily weighted towards the surviving dot-coms (Amazon.com, AOL, eDiets, X-10 Wireless, eBay, etc.). The top 25 list of 2003 was a different story. X-10 has dropped off entirely, while others have decreased spending. Strong online companies like eBay and Amazon have likely tapered off banner advertising because they have already built their brands. The telecom and financial services resurgence that drove increased online marketing investment in those sectors was reflected by SBC (+168.1 percent year over year), AT&T Wireless (+21.3 percent) and Verizon (+5.6 percent), which all made the top 25 list as did Ameritrade (+22.8 percent), BankOne (11.9 percent), Scottrade (+26.7 percent), Ameriquest (+352.7 percent), Citigroup (+3.8 percent) and LowerMyBills.com (+775 percent).

Nielsen//NetRatings AdRelevance estimates 223 percent rich media growth Q1-Q4 to 17.4 percent of all ads. Within the DoubleClick system, rich media grew to nearly 40 percent (39.7 percent) of all ads served by Q4. In terms of performance, DoubleClick’s new Audience Interaction Metrics, which measure interaction with rich media ads served through DART Motif, showed initial strong results. In Q4, the average amount of time a Motif ad displayed in a user’s browser was 41.9 seconds and the average amount of time a user interacted with the ad was 21.9 seconds. Figures like these are intended to help marketers make comparisons with broadcast media, where a typical unit can engage a consumer for 30 seconds.

The Fortune 500 voted in favor of rich media during the year, accounting for 45.5 percent of all rich media advertising in Q1 and 38.8 percent in Q4. Cell phones led this category: SBC at 2.2 billion impressions, followed by AT&T Wireless at 1.9 billion impressions.

Pop-ups and pop-unders, which DoubleClick categorizes as a subset of rich media, are perhaps the most controversial form of online advertising. Not surprisingly, their usage did not grow dramatically in 2003. Within DoubleClick’s system they account for under 2 percent of all ads served, and AdRelevance shows them as fluctuating between 5 and 7 percent of the total market. The big-brand advertisers however continue to shy away from them; Fortune 500 share of pop-up advertising is lower than industry average at 3 percent of all Fortune 500 advertising.

The other growth story of 2003 was search. But, while search is clearly hot among online advertisers, it should be noted that its impact is category-relevant. An annual survey sponsored by DoubleClick (Touchpoints II, March 2004) of over 2,000 consumers who have made purchases of particular types of products in the last six months, showed that their usage of search varied by product type. Of those who visited Web sites to learn about products and services, 58 percent of those searching for consumer electronics used a search engine and 53 percent of those looking for prescription drugs did so. But for products like telecommunications, only 38 percent did so. For credit cards and banking, only 20 percent did so. In categories with lower usage of search, consumers were more likely to guess URLs, probably because these categories have more established brand or product names.