Report: Advertisers To Spend More Heavily On, And More For, Digital Channels

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Continued economic uncertainty will inspire advertisers to rely more heavily on digital channels, according to revised spending forecasts from eMarketer. Next year, U.S. online ad spending will increase 10.5% -- followed by double-digit growth every year through 2014, when spending will reach $40.5 billion, eMarketer predicts.

"It may seem ironic, but marketers' economic concerns are leading them to spend more for online advertising," said David Hallerman, principal analyst at eMarketer. "This trend reflects how most forms of Internet advertising are now seen as more of a 'sure thing' than most traditional media."

In particular, online video advertising will remain the fastest-growing format throughout the period, while search will continue to get the most dollars, according to Marketer, which forms its forecast by performing a meta-analysis of research estimates and methodologies from various tracking firms.

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"Marketers of all sizes increasingly acknowledge the Internet's central place in people's lives by devoting larger shares of their ad budgets to digital," Hallerman said. "We see this when big brand marketers spend more for online video advertising, and again when small and mid-size businesses spend more for banner ads and search."

Increases in online spending will far outpace those for total media spending, which will inch up by 1.2% next year after rising 3% in 2010. In 2014, eMarketer estimates total media ad spending will be $188.5 billion, up from $168.5 billion this year.

"The slight upticks in 2010, 2012 and 2014 reflect the now-unlimited political ad spending by corporations," added Hallerman. "Some of those dollars will be migrating online, although TV will remain by far the biggest political ad-spending recipient."

Overall, faster growth online will help propel digital from 15.3% of total U.S. ad spending in 2010 to 21.5% by 2014, according to eMarketer.

As such, added Hallerman, "the digital ad business is increasingly just the ad business, without separate silos for interactive media."

Next year, Facebook's ad sales alone will total $3.2 billion, according to a recent estimate from Cowen & Co. analyst Jim Friedland.

 

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