RealTime IT News

Traditional Advertisers Concerned About ROI on Internet

A new survey of traditional advertisers finds the percentage of companies venturing online increased only three percent from a year ago, and the biggest barrier to Internet advertising continues to be no proof of return on investment (ROI), according to the Association of National Advertisers Inc (ANA).

The statistics come from a survey of the company's membership -- which numbers 292 companies and includes firms like AT&T, Coca-Cola, and Procter & Gamble -- which yielded 208 responses from 114 companies.

The survey results, which may come from too small a sample to be very significant, provide a window into the minds of traditional advertisers, whose embrace of online advertising will be critical for the growth of the medium.

The percentage of respondents advertising online had risen to 64 percent, three percent more than last year. However, the average spending for those who did go online tripled from a year ago -- rising to $1.9 million. Still, online advertising only represented 2.8 percent of respondents' total advertising budgets.

That increased ad spending may have partially been sucked up by a 51 percent increase in production costs for online advertising. The ANA suggests that may have been driven by an increase in sponsorships, which are relatively more expensive to develop than banners.

The main obstacle to companies making more online ad spends, according to the survey, was no proof of ROI. That problem was cited by 49 percent of respondents. Although online retailers can measure click-through, and even click-to-purchase, that measurement may not be as meaningful for more brand-oriented traditional advertisers.