US Online Advertising Forecasts From eMarketer

The online ad sector has undergone two years of decline following the burst of the dotcom ‘bubble’ and has not been helped by the downturn in the broader advertising market. In many cases, whilst tightening their belts in tough conditions, marketers turned back to what they knew – traditional media.

As the media market begins to pick up again and as online becomes more accountable, thanks to better metrics, there are increasing grounds for optimism. eMarketer forecasts that growth will rise to 7.5% in 2004 and 12.5% in 2005, when online spend in the US will be worth $8.1 billion.

US Online Advertising Spend Forecasts
	Spend ($ billion)	Growth (%)
2000	8.2	–
2001	7.2	-12.3
2002	6.3	-12.5
2003	6.7	6.3
2004	7.2	7.5
2005	8.1	12.5
Source: eMarketer, December 2002

Comparative figures As well as producing its own figures, eMarketer has compiled a set of other forecasts for comparison. There is clearly a wide discrepancy between the predictions, due to a number of factors, including economic uncertainty, shifting spending and budgets and the various dates on which the studies themselves were published.

Nevertheless, all but one of the groups predict that there will be positive growth in US online spend in 2003.

US Online Advertising 2003 Growth Forecasts
	Date	Growth (%)
Adams Media Research	May-01	17.8
Zenith Media	Dec-01	15.3
Kagan World Media	Dec-01	13.4
Jupiter Research	Oct-02	10.7
JP Morgan	Aug-02	7.2
eMarketer	Dec-02	6.3
GartnerG2	Oct-02	4.7
Veronis Suhler	Jul-02	4.0
Myers Group	Oct-02	-3.0
Source: eMarketer, December 2002

Share of total adspend Using JP Morgan total media spend as a baseline, eMarketer predicts that online’s share of total advertising will reach 2.8% by 2005. This is up from the 2.5% of last year, but still below the 3.1% that was achieved in the heady days of 2000.