• April 23, 2008

The Kelsey Group is pegging revenues from online classifieds and vertical ads in the U.S. to hit $14.7 billion by 2012--up more than 30% from last year's $3.9 billion.

Vertical ad spending (including buys in home services, health care and auto repair) will soar from just $100 million in 2007, to $5.6 billion in the next four years. Meanwhile, Kelsey Group analysts said spending on online classifieds will top $9 billion by 2012.

According to Kelsey Group program director Peter Krasilovsky, online classifieds and vertical ads have been overshadowed by growth in search, display, e-mail and lead generation--but as the market continues to fragment, marketers' budgets will start to shift (both off- and online) out of necessity. "We're seeing an accelerated effect from fragmentation, which will draw ad revenue from traditional media toward online vertically targeted solutions," Krasilovsky said.

--Tameka Kee