Advertisers This Year Will Spend More Online Than On Newspaper Ads: eMarketer

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For the first time ever, advertisers this year will spend more online than on newspaper ads -- including both print and online -- according to new data from eMarketer. While perhaps inevitable, the projection marks a major milestone for online advertising, and the waning age of broadsheets.

"It's something we've seen coming for a long time, but this is a tipping point," said Geoff Ramsey, CEO of eMarketer. "Marketers are devoting bigger shares of their budgets to digital media as they see more customers shifting time toward the Web."

This year, online ad spending will grow 13.9% to $25.8 billion, while advertisers are expected to spend just $22.78 billion on print newspaper ads -- down 8.2% year-over-year, according to eMarketer, which benchmarks its U.S. newspaper ad spending projections against data from the Newspaper Association of America.

Together, newspaper ad revenues from print and online ads are expected to total $25.7 billion this year -- still short of the $25.8 billion advertisers will spend online.

According to Ramsey, increased consumer use of the Web isn't the only reason marketers are putting more dollars online.

"The bad economy has actually accelerated the shift to digital advertising," Ramsey said. "Online ads -- especially search ads -- are increasingly seen by many marketers as a more reliable bet than print ads, which are often difficult to tie to a measurable financial result."

While total ad spending in the U.S. is expected to bounce back for the full year, growing 3% in 2010 to $168.5 billion, newspaper spending is expected to continue its decline next year.

EMarketer estimates that print newspaper ad spending will slide to $21.4 billion in 2011 -- down 6% from 2010. On the other hand, online ad spending is expected to grow 10.5% in 2011 to reach $28.5 billion.

By 2014, eMarketer recently predicted that growth in spending on online display ads will outstrip that for paid search -- although search will continue to take a greater share of dollars.

This year, both search and display are on track to outpace overall U.S. online ad spending, estimated by eMarketer at 13.9%.

Between 2011 and 2014, however, eMarketer projects that online display spending will grow faster than overall online spending, while search spending will lag slightly behind.

The increase in display advertising will be driven partly by the dramatic rise predicted in online video advertising, set to grow by at least 34% every year through 2014. Banner ads will experience more moderate gains of between 7% and 16.2% annually, while rich media spending will stagnate.

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3 comments about "Advertisers This Year Will Spend More Online Than On Newspaper Ads: eMarketer".
  1. Ian Gilyeat from I.R. Gilyeat & Company , December 21, 2010 at 11:02 a.m.

    True - the trends don't lie... but this doesn't have to lead to the death of newspapers. Newspapers can survive and compete for ad dollars IF they effectively integrate their offline content with online tools and capabilities.

  2. Lawrence Graf , December 21, 2010 at 1:45 p.m.

    Ian, I agree. There are also signs (including this) that the pricing gap between print and online is closing as advertisers realise that eyeballs are eyeballs!

  3. Jonathan Mirow from BroadbandVideo, Inc. , December 22, 2010 at 5:05 p.m.

    I agree with Ian - this doesn't point to the death of newspapers, that coffin was nailed shut long ago by the failure of the entire newspaper industry to realize the threat the internet posed to their core products. First a guy named Craig killed more then 50% of their ongoing revenue by giving away classifieds for free, while the rest was picked apart by self-serving management flunkies protecting what was left of thier minor-league fifedoms. I'm sad my kid won't have the love affair I did with the printed word - but they've got nobody to blame but themselves.