• by Masha Geller , April 3, 2002

It seems a little odd to be talking about ad spending forecasts when Jupiter Media Metrix only has a few months to live, but here it goes:

In the Online Advertising: Statistics, Strategies, Projections & Trends Report released today, eMarketer – one of the few trustworthy forecasters left out there - predicts that US online advertising spending will increase 11.0% in 2002. That's a bounce back from the 11.0% drop in 2001.

Other researchers, such as Lehman Brothers at 10.9%, see similar growth rates. In fact, 16 of the 18 comparative estimates in the report project a jump in online ad spending in 2002. eMarketer reports that the worst of the market's downturn has passed, and that it will rise to $13.5 billion by 2005.

“Online advertising by traditional companies is one area of growth,” says eMarketer analyst David Hallerman. “As the Internet audience becomes increasingly mainstream, we'll see more and more cross-media campaigns from traditional advertisers.”

The Online Advertising Report also explains that, in order for the online ad industry to reach its potential, the complexity of pricing models and ad-size standards needs to be addressed. For example, Jupiter Media Metrix predicts that performance-based deals will become increasingly prevalent, rising to 30% of all online ad revenues by 2006.

“The news is where the money is being spent,” says Hallerman. “Banner ads, which traditionally have accounted for the bulk of online ad revenues, are declining. Large, rich-media ads are getting better click-through rates. DoubleClick says the big ads, in combination with less ad clutter online, are responsible for click-through rates increasing from the usual 0.25% to 0.50% range to over 0.8% this past month.”