Retail Industry: Online Advertising Spending and Trends

The Retail Industry: Online Advertising Spending and Trends report focuses on the fastest growing segment of the overall advertising market — online advertising. More specifically, it looks at how the new targeting opportunities will affect the retail industry, online and offline.

eMarketer projects that online advertising spending will increase by 20.2% in 2005, reaching $11.3 billion by year's end. That means Internet advertising will account for 4.0% of all US advertising spending during the coming year, up from approximately 3.5% in 2004.

Nevertheless, when it comes to the proportion of overall advertising budgets spent online, traditional retailers continue to lag other industries. Last year leading retailers spent less than 1% of their total ad budgets on Internet-based advertising.

But there are clear signs that the situation is changing — and good reasons why.

Questions the Report Answers:

• How much does the retail industry spend on online advertising?
• How much will it spend in the future?
• Which retailers are the leading online advertisers?
• What are retailers doing to improve their e-mail marketing campaigns?
• How effectively are retailers using paid search to drive traffic to their Web sites?
• To what extent have retailers begun to use rich media as part of their online advertising efforts?
• How does online advertising best fit in with a multi-media retail campaign?
• What should retailers NOT do online?
• And many more...

eMarketer Reports—On-Target and Up-to-Date

The Retail Industry: Online Advertising Spending and Trends report gives you eMarketer's objective, unbiased analysis, and aggregates the latest opinions, trend data and surveys from leading marketing and communication researchers — so you get the intelligence you need to make smart business and advertising decisions.

What Works Online

Not surprisingly, e-mail marketing to house lists was by far the most popular online marketing technique used by Internet retailers in 2003, while pay for placement (PFP) search and affiliate programs were used last year by 62% and 55% of US retailers, respectively.

Shop.org and Forrester Research went on to find that just 21% of retailers said they used online banner ads last year, while search engine optimization had only been tried by 38% of retailers in 2003, although this latter online marketing tactic is experiencing significant growth in 2004.

Despite this trend toward the use of more targeted methods of online advertising, retailers are also beginning to view the Web as an effective medium for promoting their brands, as many traditional advertisers in general have begun to reach the same conclusion. eMarketer believes that rich media advertising, in particular, will fast become a popular way for retailers to promote their brands to consumers.

In support of online brand advertising, the e-tailing group has found that an average 27% of retailers' e-commerce traffic comes from Web site visitors who have directly entered their Web sites' URL. With brand recognition contributing to direct Web site navigation, this suggests that retailers may still want to include some form of banner or rich media advertising within their overall online marketing budgets. As most retailers already do, they should also strive to include their Web site URL on offline advertising, catalogs and other promotional materials.