Online Poised To Break 25% Budget Milestone, Mobile Fueling Half Its Growth
Online advertising will pass a symbolic milestone this year, becoming one out of every four dollars spent by U.S. advertisers, according to new projections from the equity research team at J.P. Morgan. The growth, writes Internet sector analyst Doug Anmuth, is being fueled by advertisers shifting budgets from analogue media to follow consumer time spent with digital media, especially Internet-connected mobile devices, as well as the continuing momentum of social media platforms like Facebook.
“As consumer behavior and time spent online rapidly shifts towards mobile, we expect advertising dollars to follow,” Anmuth writes in a report released to investors early this morning, adding: “We are projecting Internet advertising in the U.S. to grow to $43.5 billion in 2013.”
That tally, which represents a 17.4% gain over 2012 online ad spending levels, puts online media at 25% of all U.S. ad budgets.
Anmuth estimates about half of that growth will be coming from mobile Web ad spending, and without the mobile stimulus, online ad spending would grow only about 10% from 2012.
Aside from mobile, Anmuth says social media has been a “key driver of brand advertiser spend due to its large reach and highly targetable user base.”
The report, which also assigns an “overweight” recommendation on Facebook’s stock, cites a number of key moves by the social network to capitalize on its massive user reach, including a variety of new advertising formats, as well as the biddable media Facebook Exchange. Much of Facebook’s 2013 growth, however, is projected to come from its rapid expansion into mobile.
“Facebook represented 40% of the growth in U.S. desktop display,” Anmuth projects, adding: ”However, in 2013, we estimate Facebook’s total desktop revenues to decline 4% due to the shift to mobile.”