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Ad Spending By Dot.com Brands Slips In 2007

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Jun 27, 2007 

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Sarah Novotny  |

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Ad Spending By Dot.com Brands Slips In 2007

Ad spending by dot-com brands is expected to decline this year. This is the first decline in spending since the 52% drop that occurred during the 2001 dot-com bust. This drop of about 4% to $4 billion is expected and likely represents normal market variations.

Over all the spending in online advertising has steadily risen over the last four years. During the low of 2002, $2.150 billion was spent in online advertising. In 2006 $4.155 billion was spent over-all, as a significant shift to online media occurred in the advertising world.

Bob Coen, senior vice president and director of forecasting at Universal McCann wrote, “search marketing, which offers greater geographic flexibility, has probably cut into traditional media budgets of dot-com retailers and some other categories.”

His comments appeared as part of his mid-year presentation, given on Tuesday, updating his outlook for the advertising economy. 2004, 2005, and 2006 saw double digit percentage increases of 25%, 34%,and 12%, respectively. Coen said, “the era of large increases is probably ending.”

On the more positive side he noted, “in 2007, full-year results could be better than the first quarter when some dot-com marketers had temporary problems.” The numbers are broken down by year below.

Consumer Ad Spending By Dot.Com Brands
1998	$0.654 billion	+77.0%
1999	$3.086 billion	+372.0%
2000	$5.597 billion	+81.0%
2001	$2.662 billion	-52.0%
2002	$2.150 billion	-19.0%
2003	$2.210 billion	+2.8%
2004	$2.762 billion	+25.0%
2005	$3.700 billion	+34.0%
2006	$4.155 billion	+12.0%
2007	$4.000 billion	-4.0%
Source: Universal McCann

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