Worldwide spending on internet advertising will total $65.2 billion in 2008, representing nearly 10% of all ad spending across all media, according to IDC’s Digital Marketplace Model and Forecast.
IDC projects 15-20% annual growth throughout the forecast period, with this share reaching 13.6% by 2011 as internet ad spending grows to $106.6 billion worldwide.
“Compared to more mature types of advertising, Internet advertising is growing at a phenomenal rate,” said John Gantz, chief research officer at IDC. “But internet advertising is still relatively new and growing from a much smaller base. By the end of the forecast period, spending for internet advertising will trail direct mail – the third largest form of advertising – by more than $30 billion, while spending on TV and print ads will each be nearly twice as great as for online ads.
“Total advertising revenues equate to more than $105 per inhabitant of the planet, while Internet advertising revenues are less than $50 per active Internet user.”
Keyword ads will remain the dominant type of internet advertising throughout the forecast period, capturing more than a third of annual online ad spending worldwide.
Display ads will be the next largest type of internet advertising, capturing more than 20% of worldwide spending annually through 2011, followed by classified ads with nearly 19% of all online ad spending per year.
Spending in both categories will be pressured by rich media ads, which are expected to grow at a compound annual growth rate (CAGR) of more than 50% during the 2007-2011 forecast period.
The United States will lead the world in both total advertising spending and online ad spending throughout the forecast period with expenditures of more than $265 billion and $45 billion respectively in 2011.
Internet advertising will make the greatest gains relative to total ad spending in Western Europe, where online ad spending will capture 18.2% of total ad spending in 2011. This compares to a 16.3% share for online ad spending in Japan and 14.6% in the United States.
The latest IAB and PwC research found that online advertising grew almost 40% year on year in 2007 to a new high of over £2.8 billion (see UK Online Adspend Grows Almost 40% Year On Year In 2007).
This made the medium the third largest last year, up from being the smallest market sector in 2003, taking its share to 15.3% from 11.4% in 2006.
Meanwhile, a report from e-consultancy forecast that UK media spend on online advertising networks will reach an estimated £385 million in 2008, following growth of 60% (see UK Spend On Online Ad Networks To Grow).
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