By Frank J. Romano December 1, 2006 -- The good news is that Web-based marketing budgets are down. The bad news is that total marketing budgets may also be down. The good news is that FSIs are up. The bad news is that FSIs may be going down. "Companies Slash Web Marketing Budgets," read the headline: a new report by Blackfriars Communications, a consulting firm that conducts quarterly surveys of 300 senior executives about their marketing budgets, says that only 16 percent of marketing budgets will ultimately have been devoted to online marketing this year--including e-mail campaigns, Internet ads, and Web media spending. That is a big drop from the 23 percent share executives forecast at the beginning of the 2006. Online advertising's share of the total marketing budget dropped from a predicted 11 percent to 7 percent--or $38 billion. That would be good news for printers because dollars might be re-directed to print. Offline advertising rose from a projected 13 percent of total marketing budgets at the beginning of the year to about 29 percent of allocations now. But ad budgets have fallen by 11 percent in 2006 compared to 2005, according to Blackfriars--forecasting a $218 billion total ad spend by the end of 2006, down from about $245 billion in 2005. Blackfriars says overall marketing budgets have declined from $977 billion in 2005 to a forecasted $615 billion in 2006. Optimistic forecasts at the beginning of the year had predicted $1 trillion in marketing expenditures. That did not happen. Inserts may be vulnerable. A Sunday advertising circular, for example, may represent less than 300 items compared to thousands online. Which is most effective for advertisers? Which is most useful for customers? Print is measurable. The ABC and BPA have measured readership for decades. With print we know how many copies are printed. Now, advertisers are demanding audited on-line numbers. Advertisers including BMW, Colgate-Palmolive, Ford Motor Co., HP, ING, Kimberly-Clark, Pepsi, and Visa are demanding that on-line publishers begin providing audited audience figures in mid-2007, as well as measurement-certified numbers in 2008, according to the Internet Advertising Bureau of New York City. The chief executive of the Association of National Advertisers (ANA), said, "Across all media, ANA marketers are seeking transparency and accountability in measurement." In 2004, the IAB established criteria for measuring audience impressions. Inserts may be vulnerable. We have run articles on their rosy future and see them as a mainstay of retail store promotions. Yet, changes in FSI use were hinted at by an ad agency CEO during a panel of media agency chiefs at Media magazine's Forecast '07 conference. The CEO said that a major retailer has told agencies that future media plans would eliminate FSIs from its advertising plan by 2007. That ad agency is currently pitching big box retailers and is also the media agency for a chain of retail electronics stores. A big-box retail company would be ripe for a move away from inserts, they say, because 40 percent of a retailer's budget goes toward its Sunday advertising circulars which represent less than 300 stock items, where online, that big-box store can provide access to over 250,000 units. Perhaps mixed messages are common in times of industry change and transformation.