Online classified ads will grow faster than any other form of online advertising this year, said a study by Jupiter Media Metrix. Spending is expected to increase from $1.2 billion in 2002 to $2.3 billion by 2007.
Overall, Jupiter analysts forecast that online advertising spending in the U.S. will grow from $6.2 billion in 2002 to $15.9 billion in 2007, representing a compound annual growth rate of 21% over the next five years. Online advertising will account for 7% of the offline ad market spending in the U.S. over that period.
Factors pushing growth include increased broadband penetration, a sustained growth of the online population, media consolidation and general economic recovery, said a Jupiter statement.
“Although spending on online advertising was virtually flat between 2000 and 2001, it is faring slightly better than offline,” said Marissa Gluck, senior analyst with Jupiter Research, in a statement. “Only cable fared better than the Internet, which actually bodes well for the Web as it increasingly adopts the niche-orientation of cable TV,” she added.
Jupiter analysts said they expected to see an increase in cost-per-thousand (CPM) ad impressions in the years ahead. By 2007, they project that the average effective CPM rate will be $4.18.
The CPM rate had dropped between 2001 and 2002 from $2.60 to $2.50.
