Gartner says that while advertising growth remains flat or receding in television, radio and print, online advertising revenue is set to grow considerably, but nevertheless remains just 3% of the total advertising market in the US.
The report predicts that whilst online advertising continues to far out-grow traditional media, which is not necessarily that unexpected given its relative youth as a medium, the rate of growth is set slow over the coming years. For example, year on year growth will be just 15% by 2005, compared with the 100% rise of 1998.
GartnerG2 estimates that of the 2,800 sites selling advertising in the US, the top 20 receive 80% of the revenue. It is advising that online media firms diversify their revenue streams ‘in order to stay viable and capture revenue growth’.
“Due to decreased growth and market domination by the top players, online media firms must diversify their products and services to supplement the income they expected to receive from online advertising,” said Denise Garcia, research director for GartnerG2. “Diversification is the future for this industry, so those who do not branch out will see their online advertising revenues decrease and their user bases deteriorate.”
Advertisers are increasingly demanding that integrated online campaigns include other forms of interactive media, like interactive television, wireless devices and kiosks, says Garcia.
