- The Washington Times - Sunday, August 15, 2004

Online advertising is expected to reach $9.1 billion this year — a 25 percent jump from last year, according to a report by EMarketer, an online research firm.

Since dropping nearly 16 percent in 2002, online ad spending has picked up, increasing about 21 percent in 2003 to $7.3 billion. The drop in 2002 has been attributed to the burst of the “dot-com bubble” and the overall recession.

The report estimates double-digit growth in the next several years. By the end of 2005, online ad spending will top $11 billion. It is expected to hit $18.5 billion by 2008.

“The interactive ad industry is maturing,” said David Hallerman, senior analyst at EMarketer. “Research shows that high-speed Internet users spend more time and money online.”

Companies now are investing more in paid search advertising and high-tech online ads to reach this target audience, he said.

Despite its growth, online ad spending accounts for only 3.4 percent of total media spending in the United States. It is expected to account for 5.2 percent of total media spending in 2007.

The report found advertisers are pulling money from other areas in their budgets — such as newspaper or television advertising — or increasing their overall ad budgets to fund online initiatives.

Toyota, for example, increased its 2002 total media spending by 8.4 percent in 2003. But spending for online advertising jumped 109.8 percent, indicating a shift in budget allocations, the report said.

Hotel picks ad firm

The Ritz-Carlton Hotel Co., based in Chevy Chase, has hired Team One in Los Angeles to handle its $10 million to $15 million advertising account. The new agency, a division of Saatchi & Saatchi, is expected to debut a new print campaign by early 2005, says hotel spokeswoman Vivian Deuschl.

The luxury hotel chain received 87 bids from potential agencies. Hotel officials weren’t surprised by the response.

“Our name recognition is high,” Ms. Deuschl said. “People view this as a real trophy account.”

Ten agencies were interviewed, and the bids were narrowed to Team One and Young & Rubicam’s Irvine, Calif., office.

Team One, which has worked with luxury brands such as Lexus, will have a satellite office in the Washington area. For now, the agency will be working out of Ritz-Carlton’s headquarters until it finds office space of its own in the beginning of next year. The agency plans to have three full-time employees on board by October.

The incumbent agency, Sawyer, Riley, Compton, also will remain on the account until the end of the year.

New wins

O’Keeffe & Co. Inc., based in Alexandria, has added three clients worth $315,000 in total annual billings. The agency will create integrated marketing programs to increase visibility and sales for EzGov, a software company, V-Span Inc., a global conferencing services provider, and Xacta Corp., an information security company.

Baltimore’s Eisner Underground will develop a new corporate identity package, marketing communications and public relations for Webb/Mason, a Hunt Valley, Md., print management provider.

Donna De Marco can be reached at 202/636-4884. Advertising & Marketing runs every other Monday.

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