Technology Online Ad Spend to Reach $2.8 Billion in 2007
eMarketer Sees Some Resurgence In Online Marketing And Advertising By Computer Hardware and Software Companies
MARCH 30, 2006 -- NEW YORK, NY eMarketer's new report Technology Marketing: Customer Driven Convergence contains good news for Internet publishers and content providers. After several years of slow growth in the technology category, healthy spending increases are forecasted for online advertising by technology marketers and manufacturers.
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eMarketer expects the computing (hardware and software) category to grow in 2005 to account for about 15% of all online advertising, and increase to about 22% in 2007, to reach $2.8 billion. Computing products advertising, as a share of total online spending, had dipped in recent years, to 18% in 2004, from 20% of all online advertising in 2003.
Online travel spending in the U.S. during the 2005 holiday season (November 1 through December 31, 2005) totaled $8.6 billion, percent increase on last year. Last year U.S. consumers spent $7.4 billion during this period, according to comScore Networks. For the full year consumers spent $60.9 billion, percent increase on the previous year. Total Internet spending for the full year 2005, including travel, reached $143.2 billion, up 22 percent over the $117.2 billion spent online in 2004.
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Lisa E. Phillips, eMarketer Senior Analyst and author of the new report says "The technology industry is going through major changes in platforms and business models, while it competes with consumer electronics. We expect online ad spending to keep pace with overall online advertising growth, but not surpass it in the next few years."
But sales of pet supplies, cosmetics and fragrances will increase faster than other categories at growth rates of over 30 percent, the report found. Last year, online sales rose 25 percent to $176.4 billion, with 28 percent growth in online purchases excluding travel. Total Internet sales in 2004 and 2003 reached $141.4 billion and $114.1 billion, respectively, Silverman said. "I think we're still looking for the next several years (for) growth over 20 percent per year, " he said, adding that growth closer to 30 percent was probably not sustainable.
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"As hardware and software companies partner with Internet publishers and content providers to enter new markets and reach consumers in new ways," says Ms. Phillips, "a new convergence of the two industries is being created."
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For instance, software publishers are beginning to shift distribution and pricing in the consumer market. One-time sales or downloads of programs are giving way to "software as a service," where a monthly or annual subscription fee guarantees constant upgrades and system maintenance from the publisher.
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"What consumers want, when they want it and how they want it is becoming an inescapable reality for technology marketers," says Ms. Phillips. "Nowhere more so than online."
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Technology Marketing: Customer Driven Convergence answers these key questions:
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Where are technology companies spending their marketing budgets?
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Are technology marketers really more tech-savvy than other advertisers?
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What will be the real effect of the Microsoft delay?
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How do consumers shop for technology?
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How is the online customer servicing process changing?
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And many more...
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Click here for more information on eMarketer's new report Technology Marketing: Customer Driven Convergence.
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Source: eMarketer
