eMarketer Lowers US Online Ad Spend Forecast by $1.6B

March 24, 2008

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Paid Search

Advertisers in the US will spend $25.9 billion online this year, according to eMarketer’s revised US Internet ad spend projections – slightly lower than the its October 2007 forecast of $27.5 billion online ad spend in 2008.

Nevertheless, the lowered estimate is 23% more than the $21.1 billion in online ad spend in 2007. Spending is expected to reach $51.0 billion in 2012, eMarketer forecast:

emarketer-us-online-advertising-spending-2006-2012.jpg

Most online ad spending is for search, but the greatest growth will come from rich media and video ads, eMarketer said, based in part on the large portals’ acquisitions (DoubleClick, Adtech, Bebo) in the past year that will bring in the non-search chunk of the market.

Google, Yahoo, MSN and AOL are becoming one-stop shops for advertisers by building up ad networks with targeting and tracking capabilities.

“When the portal is both destination and network, perhaps advertisers can get all they need without straying – or at least that’s what the Big Four hope for,” said David Hallerman, eMarketer senior analyst, and author of the new report, “US Advertising Spending: Resilience in a Dicey Economy.”

Internet ad spend growth in 2008 will continue surpass that of all other major media, eMarketer said. After a nearly 23% increase in 2008, spending growth in 2009 is forecast to drop to about 16%, it projected:

emarketer-us-online-advertising-spending-growth-2006-2012.jpg

By 2012, an anticipated boom in online video advertising, combined with continued strength in more-established internet ad categories such as paid search and classifieds, and a recovered economy, will mean spending growth greater than 20% for the first time since 2008, according to eMarketer.

Note: eMarketer benchmarks its US online ad spending projections against the Interactive Advertising Bureau/PricewaterhouseCoopers data.

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