• by Masha Geller , October 24, 2002

What’s a Jupiter Advertising Forum without an optimistic Jupiter forecast? An impossibility, of course. As expected, the researchers unearthed their crystal ball earlier this week at the New York gathering of online aficionados and reported that while online advertising spending is expected to be flat between 2001 and 2002, 2003 spending is forecast to grow by 10%.

According to the Jupiter, marketers will spend only $5.6 billion on online advertising in 2002, but moderate economic growth in the U.S. and low effective CPM rates will fuel online spending by traditional advertisers in the near term. Online classifieds will also continue to be a bright spot with $1.4 billion in spending in 2003, representing 16% growth over the current year. Other factors driving increased spending are continuing growth in the online population, growing broadband adoption and smarter inventory control among online publishers. According to data released at the Jupiter/IAB Advertising Forum held in New York City on October 21-23, the industry will start to rebound and increase to $14 billion by 2007.

The Jupiter Research report, “Online Advertising: Traditional Advertisers, Classifieds Pave Road to Recovery,” also reveals that traditional advertisers provide the greatest online ad spending opportunities for ad sellers in the near term. According to the Jupiter Research Category Advertising Model, media currently represents 20% of online ad spending, financial services contribute 17% and computer hardware & software 12%. Within the next five years, Jupiter Research predicts that the automotive industry will spend $1.8 billion on online advertising, while health companies will spend $1 billion and the travel industry more than $800 million.

“Given the current economy, online ad spending understandably saw a year of virtually no growth, but the industry is in recovery mode,” said Patrick Keane, Vice President and Senior Analyst for Jupiter Research.

I hope he’s right.

On a housekeeping note, I know many of you have already nominated your favorite online ad campaigns in the survey we sent out yesterday. If you haven’t yet, we’d love to hear from you. The nominations will help us pick the Best Online Campaign for a special MEDIA magazine feature in the December edition. It only takes a few minutes to submit your nominations, so click here.