Ad Industry Roundup: IDC; Kellogg’s; Aquantive-Microsoft; eBay-Google

Video Ad Revenue To Overtake Search By 2011: Online advertising revenue is projected to grow from $16.9 billion in 2006 to $31.3 billion in 2011, according to an IDC report. Growth will occur at a compound annual growth rate of 13.5 percent. Search will draw the most dollars spent in online advertising throughout the five-year forecast period. After that, its share is expected to decline from 40 percent in 2006 to 32 percent in 2011. Absolute spending in search will continue to increase, despite the drop in market share. Although it’s hard to imagine Google and Yahoo sitting still while all this is happening, the report suggests that both will suffer (Yahoo to a lesser extent) as the search market loses ground to other online advertising formats. Referral ads and lead generation are also projected to assume a larger share of the online ad pie that now belongs to search.

Kellogg’s Cutback On Marketing To Kids Includes Digital: Although it was one the first marketers to offer interactive initiatives aimed at keeping kids on their site for longer periods, cereal brand Kellogg’s is curtailing its use of viral marketing, website games and mobile efforts for those under 12. The decision to do so was part of a settlement with heath and nutritional groups. Users under 12 who visit the Kellogg’s site will be limited to 15 minutes. When the time is up “automatic use break feature” is activated.

aQuantive’s CEO On Microsoft: The familiarity aQuantive had with Microsoft’s team through previous business dealings made it easy to accept the software company’s $6 billion buyout offer. Plus, it helped that both companies are headquartered in Seattle, said Brian McAndrews, aQuantive’s CEO, in a Q&A at the American Association of Advertising Agencies’ first-ever Digital Conference in New York. As for the conflict of interest issue, with Microsoft being both a buyer and seller, The current situation with Microsoft is similar to aQuantive’s existing experience operating Atlas and DrivePM along with Avenue A|Razorfish. He says there are no antitrust hurdles for the deal to overcome because aQuantive is strong in areas where Microsoft is weak, and vice versa. “We don’t have a search engine. Microsoft does. Atlas is a leader in video on demand. Microsoft has complementary IPTV. ” As for whether there’s an antitrust issue for Google/DoubleClick, he said, it’s “up to the government to decide.”

Ebay Gains Traffic After Removing Google’s Ads: Despite pulling Google’s search ads from its site in retaliation for Google’s attempt to poach major sellers from its auction site, so far eBay appears not to have suffered. According to online metrics company Hitwise, eBay’s traffic actually rose between June 5 and June 12, to 1.67 percent of all internet visits in the U.S. from 1.59 percent. There’s been a slight drop-off in the share of eBay’s web traffic that comes from Google. According to the data, Google accounted for 10.6 percent of eBay’s online traffic on Tuesday, June 7. A week later, without Google’s AdWords, about 9.86 percent of eBay’s traffic came from Google, an almost 7 percent drop. The rift occurred when Google invited eBay power sellers to a special event (which was subsequently canceled) during the annual eBay Live convention this week in Boston. EBay has described its decision to remove Google’s search ads as a “marketing experiment.”

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