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HOORAY FOR THE WEB, BOO-HOO FOR THE WEB: In a recently released report, ZenithOptimedia analysts noted: “Internet ad growth continues to run ahead of expectations. Faced with an uncertain economic future, Western advertisers are shifting even more of their budgets online, where the returns on their investment are obvious, and easy to quantify and fine-tune….Newspapers, magazines, television and radio are all losing share to the Internet, but newspapers are clearly suffering the most.”
Meanwhile, Robert Coen, senior vice president and director of forecasting at Magna, a unit of marketing giant Interpublic Group, predicted that Internet advertising will be up 12 percent this year versus 2007 — the largest increase of any category — with magazines expected to be up 1 percent and newspapers down 7 percent. “The outlook for traditional advertising is currently not very good. Eventually the pendulum will probably swing back to recovery, but not in the immediate future,” said Coen. Two of the nation’s biggest advertisers, Proctor & Gamble and GM, are devoting a substantial portion of their ad dollars to the Internet, reportedly at the expense of print. Advertising Age reported on Monday that GM has moved almost a quarter of its media spend online (the company has a total measured and unmeasured ad spend of $3 billion, according to estimates). But don’t expect fashion and jewelry firms to quickly follow suit. They still have some trepidation when it comes to advertising online for a variety of reasons, such as the fear of diluting their brands or the fact that those pricy ad images look more appealing in a glossy magazine than on a computer screen. But these issues haven’t stopped some big names — including Cartier and Burberry — from spending money online. In fact, Cartier already has devoted 10 percent of its global ad budget to the Web.
Olivier Stip, senior vice president of marketing and communications at Cartier North America, said money has been taken from the firm’s print budget to fund online advertising. “Our goal is to be a leader in the category,” he said. “It’s now an important part of what we do in reaching our existing clients, as well as provide a more dynamic way to reach a new type of customer that may not read magazines.” Every year, Cartier has expanded the number of sites on which it advertises — some examples include msn.com, aol.com, cnn.com, nytimes.com, instyle.com and Style.com. “We have banner ads and work on search engines like Google,” Stip noted. “And we know it’s working. Measurement is a focus for us and we stick with reputable sites. If we do it well, it provides more creativity.” Burberry offers a full range of ready-to-wear and accessories for men, women and children on its Web site, where e-commerce has been in place since 2004 in the U.S. and plans are under way for Europe. The company began advertising online earlier this year, on sites such as Style.com and, in the near future, online ad spending also will encompass men and children. Burberry will launch a series of podcasts, accompanied by music, later this year and recently introduced Italian-, French- and German-language sites.
Online advertising has been one of the few bright spots for publishers in the tough economy, albeit one that remains tiny when compared with print. Last week, The New York Times Co. reported that total ad revenue for the second quarter was down 10.6 percent, yet online revenue rose 13 percent. ZenithOptimedia forecasts Internet advertising to break the 10 percent share barrier this year and grow to 13.6 percent of the world ad spent by 2010. — Amy Wicks