U.S. merchants are shifting more and more of their advertising expenditures to the Internet, according to a study by Universal McCann, as reported in eMarketer.com.

By media, U.S. advertising expenditures on the Internet are expected to climb by at least 25 percent to $9.7 billion in 2006, according to Universal McCann. However, eMarketer says the Universal McCann expenditures do not include paid search ad spending, roughly 40 percent of the entire ad spending on the Internet. If paid search advertising is included, online ad spending in 2006 could jump to $16.7 billion.

Using the Universal McCann ad expenditure forecast, it appears that online ad spending will be about 5.2 percent of total “national” ad spending. If local ad spending is also included, online advertising expenditures will represent 3.4 percent of total U.S. advertising expenditures.

Online Advertising Reaches Important Jewelry Market Segment

The message for the jewelry industry is that the Internet is an important channel of distribution, especially for high-income younger consumers. Recent research suggests that these wealthy youngsters have stepped up their purchase of jewelry. If jewelry merchants want to reach this important growing market segment, they will need to evaluate their online market efforts to maximize its effectiveness.

The following table summarizes advertising forecasts by Universal McCann.