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More Advertisers Focus On Virtual Worlds

Posted by SIM on February 7, 2007

Most U.S. Advertisers Now Spending On New Media: Survey
February 7, 2007

NEW YORK (Reuters) – Nearly 90 percent of all U.S. companies polled in a new study will use part of their marketing budgets to advertise in new media like video games or virtual communities.

The survey by the American Advertising Federation underscores the shift in advertising spending away from television, magazines and, particularly, newspapers, which have suffered badly from declining circulation as more media choices have become available.

Concluding that “traditionally staid media categories are in need of innovation if they are to remain competitive,” the study found that 73 percent of the executives interviewed planned to spend up to one-fifth of their budgets on new media.

More than 12 percent of respondents said they would spend as much as 40 percent of their budget on experimentation and new media, according to the survey released this week, which polled nearly 1,000 advertising executives.

About half of the respondents picked newspapers as the media category most in need of innovation, and indeed publishers have pressed to strengthen their online presence with more content like blogs and video.

Gannett Co. Inc. , for instance, recently announced plans to overhaul its local newsrooms to report stories around the clock using text, audio and video.

The Web sites of newspapers such as The New York Times and The Washington Post also break news on a 24-hour cycle and use video and blogs to enhance what print journalists produce.

At the other end of the spectrum, the survey found that advertising executives listed the most surprising innovations of the past year as the “rush to Second Life virtual community space” and “the rise of YouTube,” the video sharing Web site.

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