Web Watch

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Internet advertising revenues reached a new high of $4.9 million in the first quarter of 2007. “The continued growth of online ad revenues clearly illustrates marketers' increased comfort with the extraordinary vitality and accountability of this medium,” said Internet Advertising Bureau president & CEO Randall Rothenberg. Despite a generally flat advertising environment in 2007, Internet advertising was up 26% over first quarter 2006 levels.

This shift of media expenditures is likely to continue and even accelerate in the years to come. And, there's a good argument that the Internet isn't really getting anywhere near the advertising investment it deserves right now.  An online study by IBM confirms that ad dollars are still very late in aligning with the amount of time consumers now spend online.

The IBM study was conducted in mid-April through mid-June and surveyed people in the US, UK, Germany, Australia and Japan. The global findings suggest Internet usage is now on par with TV usage. Nineteen percent of the respondents said they spend six hours a day on the Internet compared to 9% of respondents that spend this much time watching TV; 66% reported watching one to four hours of TV per day versus 60% that spend this amount of time on the Internet. As more people shift their media time from TV to the Internet, the dollars will eventually follow, even if there is a wide disparity today.

IBM analysts believe the role of advertising agencies will change as well. Agencies will need to provide their customers with a better understanding of how to use the Internet as a marketing vehicle and develop creative that will either be more compelling or be ignored.

The IBM study highlights can be found at www-03.ibm.com/press/us/en/pressrelease/22206.wss.

Dan McKillen is president of the HealthDay news service

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