• ClickZ, Tuesday, February 27, 2007 11 AM

Ever-bullish on Internet media, the financial-services firm Piper Jaffray now predicts that online ad spending will surge to $80 billion by 2011. Most research firms peg online ad spending at around $20 billion this year -- eMarketer, for example, expects growth to slow.

The report "User Revolution" points to shifting Web habits as the catalyst for greatly increased Web consumption overall. Several factors will contribute to this, Safa Rashtchy, the research firm's managing director and senior Internet analyst said. By 2011, the firm expects the Web to almost completely assume the TV market, it anticipates Google, as the world's largest and most lucrative advertising network, to become a dynasty, it expects the idea of the Web portal to disintegrate completely, opening up new ad inventory, and new avenues for local media companies to reach groups of highly targeted consumers. (Read: a boon for ad networks).

This last phenomenon will lead to increased fragmentation of media choices on the Web, meaning ad agencies will have to adapt accordingly. Planning will be key, as the new realities mean agencies must become more mindful of placing ads on multiple channels across a broader Web landscape. The company's enormous projection figure indicates its confidence in the ad industry's ability to meet these challenges.

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