Financial services company, Goldman Sachs has predicted 2005 to be a bullish year for online advertising, forecasting the market to increase by 28% year on year, to reach $12.3 billion.
The report, based on 2,000 surveys by market research firm Synovate, estimates that online advertising could account for 7% of total advertising expenditure by 2009, up from between 4% and 5% last year. Search targeted marketing is predicted to represent more than 50% of all online ad dollars.
Forecasts released earlier this month by Forrester Research are more optimistic than Goldman Sachs, predicting online adspend to reach $14.7 billion this year, a 23% increase on its 2004 estimates (see US Online Ad and Marketing Spend To Reach $14.7 Billion in 2005).
Analyst eMarketer’s predictions are closer to Goldman Sachs’, projecting online advertising to hit $12.9 billion in 2005, a 34% rise on eMarketer’s 2004 forecast (see Online Adspend To Hit $13 Billion In 2005).
Media agency network, Carat, predicts internet advertising to continue performing strongly in 2005, with growth forecast to reach around 20% in 2004 and 2005. The internet’s share of global adspend is currently 3%, but is expected to increase substantially over the next few years as the medium becomes an essential part of advertisers’ tool kits (see Carat Predicts Global Adpsend Growth Of 4.9% In 2005).
Goldman Sachs also estimates that 59% of homes with internet access will have broadband connections this year, up from 50% in 2004.
According to eMarketer’s new country by country broadband estimates, China is predicted to take overtake the US in terms of total broadband households, even though its current penetration rate is only 6.5%, compared to 29.9% for the US (see US Broadband Penetration Drops Out Of Top Ten).
The leader in broadband penetration continues to be South Korea, with its 73% penetration rate resulting from a very competitive broadband market and vigorous government support in the late 1990s. Hong Kong follows, with a penetration rate of almost 60%, while Taiwan has just over 50% penetration.
Elsewhere, in its Europe Broadband report, eMarketer revealed that Europe was performing strongly in terms of broadband adoption, with penetration in Western Europe increasing by nearly 65% over 2004, twice the rate of the US (see Europe Enjoys Impressive Growth In Broadband Up-Take).
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