• by Wendy Davis  @wendyndavis, July 25, 2006

Online ad spending will continue to climb for the next five years, reaching an estimated $25.9 billion by 2011, according to a report issued today by JupiterResearch.

The report, "US Online Advertising Forecast, 2005 to 2011," is especially bullish on search marketing. JupiterResearch states that search advertising surpassed display ads last year, and predicts that search will dominate online advertising for at least the next five years.

Earlier this year, the Interactive Advertising Bureau and PricewaterhouseCoopers likewise reported that search advertising had captured the single largest proportion of online ad spending. The IAB concluded that search accounted for $5.1 billion last year, or 41 percent of online ad revenues, while display ads were responsible for $4.3 billion, or 34 percent of online ad spending.

Emily Riley, an analyst with JupiterResearch and the lead author of the report, attributed the increase in search spending to an influx of new advertisers.

JupiterResearch also reported that online advertising this year was likely to surge 21 percent; while this figure marks a large growth rate by any measure, it's considerably lower than the 40 percent that JupiterResearch estimated online advertising grew by last year.

Some other researchers have predicted even higher growth rates this year. Universal McCann's Bob Coen, svp and director of forecasting, expects online ad spending to grow 25 percent this year, not including search. Additionally, research firm eMarketer predicts that online advertising spending, including search, will grow 33.2 percent this year.