Trivia question for the cable crowd. Which company spent the most on Internet advertising in 2005?
The answer: voice over IP (VoIP) service provider Vonage Holdings Corp. Vonage led the pack in Internet advertising by spending $220 million last year, according to Nielsen/NetRatings. In the fourth quarter of 2005 alone, Vonage spent $39 million to buy nearly 15 million online impressions. Interestingly, BellSouth and SBC (now AT&T) came in ranked sixth and seventh in Q4, spending $9 million and $8.2 million respectively. Details are available at http://www.netratings.com/pr/pr_060119.pdf
In the same update, Nielsen/NetRatings highlighted the surging popularity of Apple's iTune's service. The researcher found that 'traffic to Apple's iTunes Web site and use of the iTunes application has skyrocketed 241 percent over the past year, from 6.1 million unique visitors in December 2004 to 20.7 million in December 2005, reaching nearly 14 percent of the active Internet population.' And not surprisingly 'teens are disproportionately represented among iTunes users; 12 to 17 year olds are nearly twice as likely to visit the iTunes Web site and use the application as the average Internet user.'
The good news for cable is that iTunes drives demand for broadband access. The bad news is as its user base explodes and Apple rapidly expands its video inventory, iTunes may increasingly compete with cable for consumer video spending. Especially as today's teens turn into tomorrow's cable subscribers.