Internet ad spend to grow marginally this year

MUMBAI: Internet advertising analysts in the US are upbeat about prospects for this year. However the irrational exuberance from the dotcom era is a thing of the past.

A report in wired.com has stated that clients will increase online ad expenses by 20 to 25 per cent. Jupiter Research analyst Nate Elliott said, "In 2003, we see online ad spend at $6.3 billion total. This will increase to $7.6 billion in 2004. This represents an increase of around 21 per cent. We see 2003 as a rebound year. What we shall see in 2004 is an extension of that and overall even better growth. Online advertising markets grew 10 per cent in 2003."

The report also quoted Elliott stating the big story for 2004 would be that online marketing would start to split into direct marketing and branding. "Direct marketing opportunities include paid search. Branding opportunities include rich and streaming media ads, such as the :30 video ads Doritos runs on Launch.com.

Another report stated that what made the advertising world in the US feel shaky was America's new cold war with Islamic extremists. DDB Worldwide CEO Ken Kaess said that the tendency for clients was to react to the economy. Keeping this in mind a lot could still change especially foreign policy. Therefore while things were certainly improving the definition of what constitutes normal has still not been met.

The report went on to note that in the US the dominance of the traditional ad agency as the architect of client strategy came under attack in 2003 in an increasingly fragmented world of media, marketing services and branded content. Ad agencies now have to deal with the squeeze being put on their bottomlines not just in bad times but also when things are looking up. Cost-conscious clients have started to shift their focus from reducing spending to driving top-line growth.

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