There have recently been many industry surveys/reports about online marketing spend trends and the movement of offline $ to online. The latest report about online ad spending projections was today: the IAB released a report about online ad spending. It showed that in Q4 of 2006, internet ad spending was up 34% over Q4 2005 (total of $4.8B was estimated.) Then, just a few days ago (2/27), Emarketer’s report stated that growth in the online ad market should slow from its red-hot levels to around 19% this year.

Swinging to the focus on search, SEMPO’s State of Search Marketing 2006 survey indicated that spending on search engine marketing was going to double by 2011, to a total spend of $18.6B. And that SEM continues to “poach” money from other channels, esp offline.

Obviously, lots and lots of dollars are pouring into online ad spending and taking $ away from offline (indeed, Microsoft’s SVP of marketing stated at the AAAA conference that by 2010 he expects most of their budget to be spend on line.) And last week, Forrester released research which stated that traditional/offline agencies’ skill sets showed gaps regarding how to leverage new marketing technologies/venues. So should we sound the death knell for old-school traditional offline marketing and the “dinosaur” ad agencies?

I’d argue not. Larger, mass marketer type companies who want brand awareness will still spend in the “old media.” It’s not going to go away, but yes, ad spending may decline in the off-line world. The challenge for the offline marketers will be how to make all their communication efforts work together and really understand the technologies and the unique ways to address communication challenges. (Memo to Wal-Mart: no more flogs!)

Solving this challenge is easier said than done, but hey, I remember the collective thinking a few years back that the advent of Tivo was the beginning of the end for the broadcast TV spot. And you Madison Ave’ers made it thru that, right?!?!

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