US analyst, eMarketer, has released new forecasts for 2005 advertising expenditure predicting online advertising to rise by nearly 34% in 2005 to about $13 billion. Paid search is estimated to grow by 40% over the year to $5.4 billion, up from previous estimates of $4.7 billion.
The success of search engines Yahoo and Google have caused eMarketer to up its estimates. eMarketer senior analyst, David Hallerman said: “The reported results from Yahoo and Google showed that I was being a little too conservative about the web search advertising those companies have popularised.”
eMarketer’s new 2005 forecast predicts strong growth of high-speed internet in the US, estimating over 50% of homes to be connected to the medium, which deliver more sophisticated video and pay per view content as well as more varied advertising vehicles and revenues online.
Tom Hyland from PricewaterhouseCoopers (PwC) said: “The increased adoption of broadband will continue to evolve the face of interactive advertising as more compelling media ads and video formats are created. More and more brand marketers will look to interact as an integral platform to deliver rich experiences for brand building and enhancement.”
Last year online advertising formats enjoyed significant growth with the Internet Advertising Bureau (IAB) and PwC showing online advertising expenditure to have totaled $9.6 billion, exceeding the previous record set in 2000, by nearly 20% (see Online Adspend Overtakes Radio 2004). Earlier estimates from eMarketer predicted the medium to hit $9.5 billion.
Consumer advertisers continued to represent the largest category of advertisers in 2004, accounting for 49% of last years annual revenues, up significantly from the 37% reported for the same period in 2003.
A report published earlier this year by Jupiter Research predicts US online adspend to reach $16.1 billion by 2009, almost doubling 2004’s figure of $8.4 billion (see US Online Adspend To Reach $16.1 Billion By 2009).
Four categories are predicted to lead the way in terms of online advertising growth over the next four years, with the automotive category expected to increase by 33.8%, followed by health at 19.7% and travel with a 18.3% rise by 2009. >
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