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emitch / Roy Morgan Research: Internet Advertising Intentions and Attitudes Survey

Major advertisers report that they will invest close to 22% of their total advertising dollars online in 2007, according to the latest emitch / Roy Morgan Internet Advertising Intentions and Attitudes survey.

Major advertisers allocated 16% of their advertising dollars to Internet advertising in 2006, the same percentage reported during last financial year.

A majority of advertisers have now embraced the Internet with 64% of advertisers surveyed having invested in online advertising during the past 12 months, up 5% from January 2006. This latest survey found that general online advertising continues to be the dominant type of Internet advertising purchased.

Ninety-eight percent of advertising agencies surveyed had placed advertising online during the past 12 months. This was a 15% increase from the 83% reported in January 2006 and a 4% increase from July 2006.

Advertisers, agencies and publishers were optimistic about the role the Internet plays as a part of the overall media mix, with the majority of advertisers, agencies and publishers (82%) agreeing that “the Internet will be a vital component of my company’s marketing strategy over the next three years”.

Online Advertising Behaviour

General online advertising, paid advertising that appears in a variety of formats including banners, buttons or pop-ups, continued to take the lion’s share (59%) of advertisers’, agencies’ and publishers’ online advertising spend in 2006. This figure is a decrease of 3% from 2005; when general online advertising accounted for 62% of the overall online spend.

The overall proportion of internet advertising dollars spent on classifieds (11%) and search and directories advertising (29%) also remained at similar levels to those reported in previous surveys.

The proportion of advertisers’ online budget that was spent on general online advertising remained at similar high levels (55%) to previous findings (see Chart 1).

Advertising agencies increased the proportion they spent on search and directories (31%, up 5% from the 2005/06 financial year), while publishers increased the proportion that was spent on classifieds (20%).

Internet Spend Intention Remains Strong

When asked to consider how their internet advertising spend would be allocated in 2007, advertisers indicated that there would be little change from their 2006 growth predictions.

Advertisers expected that 54% of their online advertising dollars will be spent on general online advertising, down 1% from the 55% forecast for 2006.

Perceived Strengths and Weaknesses of Internet Advertising

Advertisers, agencies and publishers did not always share the same views in regards to what they perceived to be the greatest strengths and weaknesses of advertising on the Internet.

The Internet’s “targeting capabilities” was seen by advertisers as its greatest strength as an advertising medium, and was mentioned by 19% of advertisers.  A further 16% of advertisers viewed the Internet’s “high accountability” as its greatest strength.  Both advertising agencies and publishers reported the Internet’s “high accountability” (29% and 22% respectively) and “targeting capabilities” (15% and 33% respectively) as its greatest strengths.

Respondents were also given the opportunity to voice any other strengths or weaknesses that they felt the Internet had as an advertising medium. When looking at all strengths mentioned in total, the most often cited strengths by advertisers were again the Internet’s “effective targeting” (28%) and its “high accountability” (25%).

Advertising agencies (14%) and publishers (17%) regarded “clutter” as one of the greatest weaknesses of the Internet as an advertising medium.  “Internet users ignore advertising” was also mentioned as the Internet’s greatest weakness by 14% of advertising agencies, while a further 17% of publishers said that the Internet’s “insufficient accountability” was its greatest weakness.

Again, all respondents were given the opportunity to voice any other weaknesses that they felt the Internet has as an advertising medium. The weakness advertisers most often gave was that “Internet advertising is annoying” (11%).

Evaluating the Medium

The vast majority of advertisers (71%), agencies (92%) and publishers (100%) surveyed agreed that “Internet advertising will be a vital component of my company’s marketing strategy over the next three years”. The majority of advertisers (74%), advertising agencies (85%) and publishers (72%) also agreed that “advertising on the Internet allows me to efficiently reach my target audience”. Seventy-five percent of all respondents agreed that “advertising on the Internet has high accountability due to the sophisticated measurement tools available”.

The majority of advertisers (70%) plan and purchase online advertising as part of a total media strategy, while 24% plan and purchase online advertising separately from other media with its own specific objectives. The remainder of advertisers plan and purchase online media in some other way.

The emitch/Roy Morgan Research Internet Advertising Intentions and Attitudes survey is a collaboration betweens Australia’s largest online advertising agency, emitch limited, and Roy Morgan Research.

This latest survey is the seventh wave of the series and was conducted by telephone and email during January 2007. Respondents were marketing decision makers from 80 prominent Australian advertisers, as well as 52 advertising/media agency media decision makers and senior sales executives from 18 of Australia’s leading online publishers.

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