Online Ad Spend Projected To Soar To Nearly $40B

by Gavin O'Malley, Jan 19, 2012, 1:11 PM

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In a watershed moment for the Web, researchers expect domestic online advertising to finally surpass print adverting in 2012.

According to eMarketer, U.S. online ad spending -- which grew 23% to $32.03 billion in 2011 -- will grow an additional 23.3% to $39.5 billion this year. By contrast, total spending on print newspapers and magazines is expected to fall to $33.8 billion in 2012 from $36 billion in 2011. 

While difficult to quantify -- except in sheer dollar terms -- eMarketer credits Madison Avenue’s growing comfort level with the Web for driving online advertising.  

“Advertisers’ comfort level with integrated marketing is greater than ever, and this is helping more advertisers -- and more large brands -- put a greater share of dollars online,” said David Hallerman, eMarketer principal analyst.

According to Hallerman, the increasing amount of time that consumers spend with digital platforms, along with advertisers’ increasing recognition of the Web as a more measurable medium -- particularly as the soft economy forces businesses to be more accountable with their ad dollars -- have contributed to digital’s growing footprint.

Despite concerns about the economy among agencies and marketers, total ad spending in the U.S. is expected to continue to rebound in 2012 after rising 3.4% to $158.9 billion in 2011, according to eMarketer.

Total U.S. media ad spending will grow an estimated 6.7% to $169.48 in 2012, driven by the national elections and summer Olympics in London, the firm estimates.

While several notable firms downgraded their 2011 estimates for U.S. ad-spending growth during the latter portion of the year, eMarketer’s estimates for total media ad-spending growth remain slightly more confident. This is a result of the rapid rise of digital advertising and brands’ continued confidence in television advertising, despite increasingly fragmented viewership and the soft economy.

In the newspaper industry, digital revenues remain a sole bright spot. eMarketer estimates that U.S. digital ad revenues for newspapers will grow 11.4% to $3.7 billion after rising 8.3% to $3.3 billion in 2011.

Print advertising revenues at newspapers, however, will dip an additional 6% to $19.4 billion in 2012, eMarketer believes, after falling 9.3% to $20.7 billion in 2011.

Digital advertising spending at magazines is expected to grow 19.3% to $3.3 billion this year, after growing 18.8% to $2.7 billion in 2011.

eMarketer forms its forecast for advertising spending though a meta-analysis of reported revenues from major ad-selling companies, as well as results from benchmark sources such as the IAB/PricewaterhouseCoopers, Newspaper Association of America, Radio Advertising Bureau and Outdoor Advertising Association of America.

It also considers research estimates and methodologies from dozens of firms that track ad spending.

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