Online Ad Spending Will Boom to $28.5 Billion in 2011

According to eMarketer, the continually struggling economy will direct ad dollars toward the Internet. This means that after shrinking in 2009, U.S. online ad spending is set to see healthy growth for the next several years.

In 2009, U.S. online ad spending was $22.7 billion, down 3.4 percent from the previous year, according to eMarketer. This figure is expected to grow 13.9 percent to $25.8 billion in 2010.

In 2011, online ad spending is forecast to reach $28.5 billion, up 10.5 percent from 2010. This figure is expected to rise to $32.6 billion in 2012, up 14.4 percent year-over-year. In 2013, online ad spending in the U.S. is forecast $36.0 billion (up 10.4 percent) and in 2014 it’s expected to reach $40.5 billion (12.5 percent).

David Hallerman, principal analyst at eMarketer, remarks that it’s seemingly ironic that marketers’ concerns about the economy are causing them to shift ad dollars online. “This trend reflects how most forms of internet advertising are now seen as more of a ‘sure thing’ than most traditional media.”

He added that marketers of all sizes are acknowledging the Internet’s significance in consumers’ lives by the dollars they spend on the channel.

eMarketer expects online video advertising to remain the fastest-growing format during this period, while search advertising will remain the most popular recipient of online ad spending.

Online ad spending will grow much faster than spending on all media. After declining 16.0 percent in 2009, total media ad spending in the U.S. is expected to grow 3.0 percent in 2010; 1.2 percent in 2011; 4.5 percent in 2012; 2.0 percent in 2013; and 3.7 percent in 2014.

While spending on online ads accounted for 15.3 percent of the total ad spending in 2010, it will account for 21.5 percent of total ad spending by 2014, according to eMarketer.

“The digital ad business is increasingly just the ad business, without separate silos for interactive media,” Hallerman said.

According to Zenith Optimedia, global ad spending is expected to grow 4.9 percent year-over-year to $449.6 billion in 2010. The company has upgraded its predictions five times during the past year.

Still, growth in 2011 isn’t expected to be as robust as it was in 2010, and the company expects the industry to reach pre-recession levels in 2012.

Sources:</strong

http://www.emarketer.com/Article.aspx?R=1008087

http://online.wsj.com/article/SB10001424052748704493004576001471049294008.html

http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-111710