US online ad spending will increase by 14.5% to almost $7 billion this year, higher than previously anticipated, according to Geoffrey Ramsey, CEO of new media research and analysis firm eMarketer.
Speaking at MediaPost’s annual Forecast 2004 conference in New York last week, Ramsey told delegates that total US online adspend would easily surpass last year’s total of $6 billion.
Online ad revenues fell by 25% between 2000 and 2002 as demand wilted and advertisers returned to traditional media during a marked recession. Analysts were predicting an upturn for 2003 but, as with the whole market, this was expected to be muted. In its most recent forecasts, eMarketer estimated that growth in online adspend would be about 5% this year (see Latest US Ad Forecasts From eMarketer).
However, internet advertising revenues went up 11% in the first quarter of 2003 (see US Internet Adspend Jumps By 11% In First Quarter) and this has forced a rethink. In his conference speech, a heartened Ramsey said that he believed online ad spending would climb 14.5% to $6.9 billion in the full year. Total ad revenue is forecast to increase by 4.9% to $248 billion.
Online adspend is yet to return to 2000 levels and still accounts for only a small proportion of all expenditure. However, attractive formats and reliable and understandable metrics are drawing advertisers back to the net and with paid search emerging as an effective revenue stream (see Paid Search Will Boost Modest US Online Ad Growth), web marketers are right to be optimistic about 2004.
