June 15, 2006

According to TNS Media Intelligence, media spending this year is expected to increase to 12 percent in 2006, up from just 10 percent in 2005.

Earlier this week, TNS released a mid-year report of its 2006 advertising outlook. TNS actually revised spending estimates downwards, but nevertheless bumped up the Web's advertising outlook considerably from January 2006.

By only tracking Internet display advertising, TNS Media Intelligence said such online ad spending is slated to grow 13 percent for the full 12 months of this year.

That estimate is almost 4 percent higher than from its January forecast of 9.1 percent, marking the greatest upward revision of any medium over the latest 6-month period.

Steven Fredericks, CEO of TNS said the company's first estimates were too conservative for Internet ad spending. He also said much of the revision comes from an acceleration in the migration of traditional media ad budgets to online ads.

Although it does not officially calculate other forms of online ad spending, including search, Fredericks said that TNS MI estimated total Internet ad spending would reach $20 billion by year-end, or about 12 percent of a $161 billion 2006 measured media ad pie when search is factored in.

"Last year we just passed the 10 percent range," noted Fredericks, adding: "obviously, the ad expenditure pie is growing and each year is kind of a new record in a sense, but we're also seeing shifts from other media into the Internet."

Fredericks singled out B-to-B magazines and newspapers--and to a lesser extent, consumer magazines and Sunday newspaper magazine supplements--as examples of media that are losing share to the Internet.

"That shift is not slowing down by any means. If anything, we see it speeding up," he said, adding that much of it appears to be going to search.

Source: Media Post