David Hallerman, eMarketer senior analyst, has identified two major shifts that have begun to restructure ad spending patterns. The first is the move toward non-advertising marketing. That is particularly true in the online space, where marketers focus more on social media and building Web sites or brand microsites. For that reason, the amount spent can be misleading because the numbers fail to capture the full extent of the growth in online marketing.
The second shift is in how people use various media. That shift affects ad spending by traditional media losing audience and associated ad dollars, and the social Internet has begun to alter how marketers need to communicate with customers and prospective clients.
While companies continued to increase the amount of investments fed this year into online video -- at $295 million -- and search -- at $236 million -- the investments during the previous year declined. The annual spending gains and losses for other ad formats were relatively mild, except for the $959 million downturn in classified ads in 2009 -- a direct effect of the recession combined with the additional impact of Craigslist.
Search will continue to take a larger slice of the budget, climbing from less than $11 billion in 2009 to nearly $16 billion in 2014. That's when search will grow in size to become about three times as big as banner or video campaigns, the next two largest media because it's more measureable than other media, according to Hallerman.
"An ad gets displayed when someone does a search query, and a query is the ultimate form of self-targeting," he says. "It says I'm interested in both this and that in this moment."
Search advertising will see the largest annual increases through 2013, including a jump of nearly $1.5 billion in 2012. But 2014 will see a major turnaround, as more new dollars flow into video advertising than into search.
The growth in spending for video ads will far outpace any other online format, running between 34% and 45% from 2009 through 2014. The growth rate is the result of video ads moving from the sidelines to center stage, becoming the main form of brand advertising in the digital space, Hallerman says.
Compare that with the amount that advertisers will spend on rich media ads. Hallerman believes rich media will recover from this year's 10.1% drop, which is due to advertisers looking for value pricing on static banners or greater effectiveness with video ads. That recovery, however, will be relatively slight, as video and search continue to climb.
Banner ads dipped slightly this year, at 2.3%. Growth from 2010 through 2014 will come in slightly better, except for the 6.3% uptick during 2012's election year. Those mild but positive spending gains describe a commoditized ad format that many marketers will use mainly to fill gaps in online campaigns.
By 2014, advertisers will have divided the online ad market more distinctly, with 46.5% spent on search and 38.7% spent on a mix of banner, video and rich media display ads.
Overall advertising spending across all media will bottom out in 2010. Estimated to come in at $163 billion next year, slightly down from $163.8 billion, that figure would represent the lowest annual total since 1999. But the good news is that the industry will have gains through 2014, according to Hallerman. Total U.S. media advertising spend in 2011 will reach $163.5 billion; 2012, $167.5 billion; 2013, 168.5 billion; and 2014, $173 billion.