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Market research may inform internet ad design process

SEPTEMBER 30, 2011 – More companies may start turning to market research to learn what tactics and strategies would best resonate with consumers as they increasingly rely on internet advertising to increase their reach.

According to a report released by the Interactive Advertising Bureau and PricewaterhouseCoopers, more organizations are devoting bigger portions of their budgets to online ads.

In the first six months of 2011 alone, internet ad revenues jumped 23.2 percent from last year’s rate, with companies spending $14.9 billion on marketing efforts in the channel, a record amount.

“These figures build upon the positive news we saw in the 2010 year-end revenue report,” stated Sherrill Mane, senior vice president of industry services at IAB. “It’s a clear signal that all of us in the interactive advertising industry are delivering meaningful results to marketers – and that they are confident in investing in interactive.”

The total revenues broke down into display-related ads (such as digital video), sponsorships and banner ads, email, lead generation, search, and classified.

Search remained the dominant category in internet advertising, accounting for almost half of all spend, but display-related ads gained a little ground from last year, accounting for $5.5 billion of overall revenue. On the flip side, classified ad spending took a hit, dropping 2 percent, while email fell 34.2 percent.

The groups also found that ads which employed a performance-based model outperformed those that used impression-based ones.

“The remarkably resilient performance of interactive advertising so far in 2011 demonstrates that more marketers are placing big bets on digital to tell their brand stories,” stated Randall Rothenberg, the president and CEO of IAB.

However, the numbers may be a bit misleading, as a separate study from Kantar Media found that while total advertising expenditures across all forms of media increased during the first and second quarters of 2011, that growth slowed down during Q2.

Jon Swallen, the senior vice president of research at Kantar Media North America, stated the results could mean the ad industry’s recovery is not as bulletproof or sustainable as some people may think.

Overall ad spend rose 3.2 percent year-over-year, accounting for $71.5 billion in the first six months of 2011, but the second quarter only saw 2.8 percent growth over the same period the year before.