September 8, 2006

While concerns about a potential economic slowdown continue to intensify, Google, Yahoo and a few other search engines are largely benefiting from the shift of advertising dollars online.

According to new statistics from TNS Media Intelligence, Web advertising spending rose 18.8 percent to $4.7 billion between January and June 2006.

Those numbers are greater than the 5.71 percent increase seen on network television, the 4.39 percent rise at magazines or the 2.59 percent boost seen on cable TV, TNS says.

These figures underscore how the Internet could grow even more important for advertisers in the coming few months if worries about lower corporate profits continue.

All of this is good news for Internet companies, and possibly more bad news for traditional media.

TNS isn't certain whether its forecast for 4.91 percent total ad growth in 2006 will pan out, even with record levels of political advertising because of mid-term elections in the U.S., says Steven Fredericks, TNS's CEO, in an interview.

"In the past twelve months, the auto sector has cut spending by $1.41 billion, representing about 1 full percentage point of the full advertising market," Fredericks says.

He added that movie studios are "being besieged from a number of different directions," including the continued growth of Internet downloads.

Source: The Street.com