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

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.

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