US Online Adspend To Hit $12.9 Billion In 2005
US online advertising expenditure is predicted to surpass the $10 billion mark for the first time this year, reaching $12.9 billion by the end of 2005, according to new predictions from eMarketer.
Commenting on the projections, David Hallerman, senior analyst at eMarketer and author of the Ad Spending Trends: The Internet and Other Media report said: “To call this advertising market ‘hot’ implies it’s a fashion that might turn slack at any moment.”
He continued: “These yearly and quarterly ad spending gains point to a sea change in media usage among marketers, reflecting how the internet has become an essential element of daily life for more and more individuals.”
Hallerman points out, however, that much of the internets increase is coming at the expense of other media.
This concern is echoed by research from online magazine, Direct, claiming that marketers are shifting their adspend onto online, with 60% planning to raise their online advertising expenditure in 2006 (see Marketers Move Adspend Online).
The new 2005 Online Marketing Survey shows that marketers are allotting 41% of marketing budgets to online channels this year, taking money away from traditional direct marketing channels. The survey found that marketers allocated 75% for the old channels last year, compared to just 59% this year.
eMarketer also asserts, however, that despite the rapid growth of online advertising it has outpaced audience growth, revealing overall adspend to have increased by 32.5% in 2004, with spend per user rising by just 27.9%.
