• by Mark Walsh  @markfwal, June 8, 2011

U.S online advertising revenue this year will surge 20% to $31.3 billion on the strength of robust display ad spending, according to the latest forecast from eMarketer. That's a jump from the market research firm's prior estimate from the end of 2010, projecting online ad sales would increase just 10% to $28.5 billion in 2011.

Higher-than-expected display advertising for the first time will put the category within striking distance of search, which typically accounts for the largest share of online ad dollars. This year, U.S. advertisers will spend $14.4 billion on search ads and $12.3 billion on display -- up 19.8% and 24.5%, respectively, over 2010.

Fueling display's growth in particular has been digital video advertising, which eMarketer predicts will increase 52% this year to $2.2 billion. Last year, online video increased 40% to 1.4 billion, according to the Interactive Advertising Bureau. Spending on ordinary banner ads is expected to continue growing in 2011 as well, rising from $6.2 billion to $7.6 billion.

After rising just 4% in 2009, online display spending bounced back last year with a 24% gain to reach $9.9 billion, accounting for 38% of total online ad revenue. The eMarketer forecast predicts that growth level would be maintained through 2011.

"As consumers continue to increase their time spent online and as the resurgent economy continues to bolster ad budgets, we're going to continue to see an influx of dollars toward the Internet," stated eMarketer principal analyst David Hallerman. "More ad formats, such as video, and more channels -- especially social media and mobile -- are also key contributors to the spending gains."

The Internet will account for nearly 20% of all U.S. major media ad dollars spent this year, up from 17% in 2010. By 2015, online advertising is expected to make up nearly 28% of all media ad spending.

By comparison, TV ad dollars will hover around 38% for the next five years. The broadcast networks' overall ad volume in the current upfront market will surpass $10 billion -- a 14.7% gain from last year, according to one bullish projection.