Marketing Budgets Head Upward; Online The Big Winner

A recently updated Credit Suisse survey indicates CMOs are increasing their spending on marketing between 8 and 12 percent in 2006. Online advertising leads the growth charts with a 35 percent increase in spending over last year. Most other media categories experienced little or no growth. According to a MediaPost story,  “Survey participants revealed that Internet advertising methods proved to have the highest perceived return on investment, significantly ahead of any other category,” wrote Credit Suisse analyst William Drewry, “...with the continued growth in the use of the Internet for both utility and entertainment purposes, advertisers see the value created by shifting dollars online.”

A new report (free registration required) from the McKinsey Quarterly seems to confirm the above. In fact, the report indicates that there is now such growing demand for online advertising that there could be future problems caused by two major factors:

1) a supply shortage of relevant, contextual advertising space online
2) a lack of advertising agency expertise in placing and working with online campaigns [not a problem here]

The Credit Suisse survey quarterly polls 100 Chief Marketing Officers, advertising agencies and other advertising decision-makers.