• by Jack Loechner , Staff Writer @mp_research, May 6, 2002

Jupiter Media Metrix reports that online classified ads will grow faster than any other form of online advertising this year in the US, with spending projected to increase from $1.2 billion in 2002 to $2.3 billion by 2007. Marissa Gluck, senior analyst with Jupiter Research, says "While the off-line classifieds market contracted by more than 15 percent in 2001, online classifieds ... increased 38 percent to more than one billion dollars. Online advertising provides a strong impetus for consumer action - including increasing traffic and sales, inspiring loyalty and promoting referrals."

Jupiter analysts forecast that online advertising spending in the US will grow from $6.2 billion in 2002 to $15.9 billion in 2007, representing a compound annual growth rate of 21 percent over the next five years. Ultimately, online advertising will account for seven percent of the off-line ad market spending in the US in the same period.

Despite an expected drop in effective CPM (cost per thousand ad impressions) rates between 2001 and 2002, from $2.60 to $2.50, Jupiter analysts expect to see modest gains in the years ahead. Online media consolidation and large format ads are beginning to leave marketers with fewer online advertising choices. According to Jupiter analysts, this combination of media consolidation and clutter reduction will result in fewer available ad impressions, raising the average CPM. By 2007, Jupiter analysts project that the average effective CPM rate will be $4.18.

You can find out more here.