As if enough advertising revenue projections haven't been released recently, eMarketer offers another one. This one, however, focuses on online advertising, claiming that revenue will increase this year to $7.6 billion, up seven percent from last year's $7.1 billion. Next year, $10.3 billion will be spent with online spending jumping to $23 billion by 2005.
The most recent revenue projections have been for flat or even lower spending, although mostly in traditional media. Still, eMarketer's report is a favorable one that offers a glimmer of hope.
Three economic drivers are boosting online spending, according to eMarketer's Online Advertising report that was released last week: online advertising has become the ultimate targeted commercial vehicle; technology is evolving that supports richer advertising content; consumers can make actual transactions online.
The report examined virtually all areas of online advertising and made these other points:
* online advertising represents four percent of all ad spending this year, five percent next year and 12 percent by 2005
* the daily use of the Internet will grow from 24 minutes this year to 27.6 next year and 31.6 in 2003
* the top 10 web properties for advertising are AOL Time Warner, Yahoo!,MSN, Microsoft, Lycos, Excite@Home, About, Ebay, Disney and Amazon
* the average CPM price for online ads is about $30, but that is the rate card price, which eMarketer says is highly inflated. The price actually paid ranges from $5 to $10 with prices sometimes as low as $1
* CPM prices for all product genres have dropped with a few exceptions, the biggest being B2B with rates jumping to $41.97 from $33.56 last year
* hyprid pricing deals lead the way, paid by 45 percent of advertisers compared with 43 percent for CPM only deals and 12 percent for pay for performance
* 11,000 web sites sell ads now, but 74 percent of ad space is unsold.