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Internet advertising: Going up, up, up

Ads on Internet increase as top-100 advertisers in America spend more online.

Harry Fuller Executive editor, CNET News.com
Harry Fuller escaped from television work to be executive editor at CNET News.com.
Harry Fuller
2 min read
No. 2 overall & online
No. 3 overall

More advertising dollars are flowing to the Internet, in a trend that started years ago. Advertising Age has come out with its annual look at theUnited States top-100 advertising spenders. There are few surprises, but it's confirmation of what you've probably been seeing and expecting. Internet ads now account for 5.5 percent of total spending by the top 100 advertisers in the U.S. That adds up to nearly $10 billion, and the Internet's about even with radio and ahead of outdoor.

What are the biggest losers? TV's share of ad spending has been dropping annually for 16 years, after it peaked at nearly 70 percent. TV now accounts for less than 59 percent of American ad revenue. Newspapers had a serious drop of revenue in the 1960s, then slowly began to recover, only to fall off a cliff following 2000. That year papers collected 16 percent of all ad revenue; in 2006 it was less than 12 percent. Since 1970, magazine ad revenue has been fairly flat, but that means not keeping ahead of inflation. Glossy print still is No. 2 in total ad dollars garnered. That leaves the Internet as the only clear winner among major ad media.

The big advertising spender is Proctor & Gamble, which leads at $4.9 billion. Second and third are AT&T with slightly more than $3.3 billion and General Motors with just less than $3.3 billion. These are followed by Time Warner, Verizon Communications and Ford Motor.

Other carmakers on the list are Toyota Motor at No. 12, DaimlerChrysler at No. 14, Honda Motor at No. 21 and Nissan Motor at No. 23--all spending well more than $1 billion annually. Other big spenders are No. 12 Sony at nearly $2 billion and No. 15 Sprint Nextel at more than $1.7 billion.

Tech brands? Microsoft is No. 45, Dell is No. 47 and Hewlett-Packard is No. 51. Each company spends less than $1 billion. Apple ranks No. 89, while Philips Electronics barely makes the list at No. 98.

Of the big 100 spenders, Vonage spent the most online in 2006 with $185 million, more than a third of its total amount spent. The No. 2 online spender was AT&T at nearly $170 million. They were followed by Dell, Walt Disney and Verizon.

TV is still leading the Internet by more than $50 billion. Anybody predicting the Internet and TV ad dollar curves will ever intersect? That'll depend on whether TV retains control of the most prized copyrighted material or whether Internet sites begin to compete with live sports and original programming with big-name stars.