• by Masha Geller , July 30, 2003

Like many researchers before it, Jupiter today predicted that search marketing will pave the road to the recovery of online advertising.

Explosive growth in paid search, increasing almost 50% to $1.6 billion in 2003, will power a modest recovery in online advertising, according to the latest findings from Jupiter Research, a division of Jupitermedia Corporation, presented today at the Jupiter/ClickZ Advertising Forum in New York.

Jupiter Research released the independent paid search projections as part of its online advertising forecast that show online display ad sales continuing to shrink 6%, to just over $3 billion. Overall, online advertising will grow 10% this year, to $6.3 billion.

"At the risk of stating the obvious, search is hot," said Jupiter Research analyst Gary Stein. "Just as important, paid search's impact reaches way beyond its dollar volume. The players, the tactics and the technologies of search are the focal point of critical digital marketing trends like dynamic pricing and contextual advertising," added Stein.

While 2003 is the year of paid search, other online advertising sectors will pick up shortly, Jupiter says. "Online display ad sales will turn around beginning in 2004," said Jupiter Research VP and Research Director David Card. "Better inventory control by publishers and a broadband kicker will push online display advertising sales up over 15% next year, and over 20% in 2005 and 2006," Card said.

Jupiter Research forecasts that online advertising, including paid search, display ads and classifieds, will grow to $14.8 billion in 2008, when online advertising will be 6% of the size of total U.S. ad spending.