Web Publishers Predict Increased Spending From Traditional, Brand-Focused Advertisers

Advertising.com's Third Annual Publisher Survey Shows That Branding Is In, Pop-Ups Are Out

Advertising.com, Inc.(SM) today released the findings from its third annual survey of online publishers.

The study surveyed publishers about their advertising business expectations for 2006. Key results forecast increased spending for online branding by traditional advertisers; increased support for video, rich media and behavioral targeting capabilities; and continued revenue growth from large creative formats.

Findings:

Brand advertising on the rise; direct response still a mainstay

Although web-based direct-response advertisers are still expected to account for the largest share of online revenue (58.5%), publishers anticipate increased spending from more traditional, brand-focused advertisers. Publishers are expecting over 32% of revenue to come from these traditional advertisers, up from 26.5% in 2005. And more than 40% of publishers are citing branding as their advertisers' main objective, more than a 100% increase over 2005 predictions.

In addition, for the third consecutive year, publishers are predicting CPM pricing to represent the largest share of revenue -- up to 45% from 41% in 2005.

Support grows for sophisticated formats

With direct-response dollars generating the largest share of publisher revenue, the number of publishers supporting contextual advertising is increasing -- with approximately 67% of publishers supporting this format, up from 50% in 2005. In addition, as increased spending is anticipated from traditional advertisers, publishers are now supporting more advanced, brand-focused creative capabilities:

--  Over 76% of publishers support rich media, up from 69% in 2005
--  35% of publishers support video as opposed to 25% in 2005
--  Roughly 30% employ behavioral targeting versus 25% in 2005
    

In addition, more than 43% of publishers now support streaming content. And of those who do not currently support streaming content, 30% plan to add it in 2006.

"Formats like streaming video give advertisers the ability to connect with consumers on an emotional, TV-like level, while behavioral targeting enables them to easily and selectively reach an in-market audience," says Scott Ferber, CEO of Advertising.com. "That unique combination of impact and efficiency is driving more dollars online and publishers are realizing the advantages of these powerful formats."

Text links dominate, pop-ups dwindle

In terms of creative trends, text links are again predicted to dominate, ranking as the most profitable ad unit for publishers. Standard banner ads and large rectangles are predicted to be key revenue drivers in 2006, with 15.9% and 14.6% of publishers (respectively) predicting the most revenue from these sizes. Not surprisingly, pop-ups are on the decline for the first time in three years and are not expected to be profitable.

Methodology:

In January 2006, web publishers who were actively working with Advertising.com were asked to complete an online survey about their advertising business outlook for the coming year. Advertising.com's web network includes over 1,000 publishers and reaches more than 138 million unique visitors (1).

Online marketing research company InsightExpress hosted the survey, and data was gathered from January 9 through January 16, 2006. Of the respondents, 47% were C-level executives, 17% were VPs or heads of sales, and 10% were media planners or buyers.

To receive a copy of the complete study, please contact Kathy Delauney at kdelauney@advertising.com.

About Advertising.com(sm)

Advertising.com conducts strategic direct-response and brand marketing campaigns that guarantee bottom-line results for our clients. From web ads to search listings, we offer diverse tactical tools, innovative thinking and the most expansive reach in the industry. Advertising.com is a wholly owned subsidiary of America Online, Inc. For more information, visit www.advertising.com or call 410.244.1370.

(1) comScore Media Metrix, January 2006

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Distributed by Market Wire

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