Commentary

Search And Banners Lead Online Ad Spend Forecast

According to a recent eMarketer revised forecast of Internet ad spending, US spending on online advertisements will increase  nearly 11% to $25.1 billion, up from $22.7 billion. eMarketer's previous prediction in December 2009 was for 5.5% growth. A stronger-than-expected search and banner market, along with the rush among advertisers for greater accountability in the still-soft economy, led to the revision.

US Online Ad Spending ($ billion, % change)

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Year

Spend (Bil$)

%Change

2008

$23.4

10.6%

2009

22.7

-3.4

2010

25.1

10.8

2011

27.2

8.4

2012

30.5

12.1

2013

33.2

8.9

2014

36.3

9.3

Source: eMarketer, May 2010

David Hallerman, eMarketer senior analyst, says "... Google reporting a 21% jump in net US ad revenues for Q1 2010... was a key signal that the tide was turning."

The search market will be up 15.7% year over year to almost $12.4 billion, while spending on banner ads will increase 8.2%. Video will again post the highest

growth rate, rising 48.1% to $1.5 billion.

US Online Ad Spend Growth by Format (% Change)

Format

2009

2010

2011

2012

2013

2014

Video

38.6%

48.1

42.7

43.4

34.7

33.0

Search

1.4

15.7

8.6

10.1

5.9

7.0

Banner ads

3.8

8.2

6.7

11.8

7.7

4.8

Lead generation

-13.8

5.5

6.6

8.4

7.0

 

Sponsorships

-1.0

4.9

5.0

5.6

5.9

6.3

Rich Media

-8.3

4.7

3.5

4.7

3.0

3.1

Email

-27.9

-5.4

4.4

7.9

2.4

3.6

Classifieds

-29.0

-13.1

-8.3

3.6

2.2

3.0

Total

-3.4

10.8

8.4

12.1

8.9

9.3

Source: eMarketer, May 2010

Brand marketers increasingly realize they need to engage their target audiences more and more in the digital space. Mr. Hallerman noted that "Even as the portal's overall net US ad revenues were down 4.5% in Q1 2010, the display ad component on Yahoo!'s sites were up by 11.7%"

As marketers pull dollars away from media such as newspapers and radio, says the report, they are shifting a portion of that spend to the Internet. In addition, growth in online video advertising is bolstered by marketers shifting dollars from their TV budgets.

The Interactive Advertising Bureau and PricewaterhouseCoopers, eMarketer's online ad spending benchmark, reported Q1 2010 spending up 7.5% year over year. eMarketer predicts even greater double-digit increases each quarter for the rest of 2010.

US Online Ad Spend Growth, 2010 (% Change)

Quarter

% Change vs. Prior Quarter

% Change vs. Prior Year

Q1

6.2%

7.5

Q2

3.0

11.4

Q3

1.6

11.8

Q4

14.3

12.3

Source: IAB, PWC May 2010, eMarketer, May 2010

"Overall, the US economy is recovering... sooner than last year's data led us to believe," Mr. Hallerman said. "... not only did the GDP increase by 3.2% in Q1 2010, but there was a corresponding 3.6% gain in personal consumption expenditures... greater consumer activity is one of the prime motivators for greater advertising spending."

For additional information from eMarketer, please visit here.

2 comments about "Search And Banners Lead Online Ad Spend Forecast".
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  1. Evan W from Experience Advertising, Inc., May 24, 2010 at 9:08 a.m.

    Thanks great news!

  2. Mike Einstein from the Brothers Einstein, May 24, 2010 at 9:27 a.m.

    Search and Banners...one speaks to already formed intent and the other speaks to no one. Sounds like great branding strategy.

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