US And Worldwide Internet Population And Advertising Forecasts
The US online advertising market is due for expansion, with growth of 11.0% forecast for 2002, according to the Online Advertising Report released by eMarketer this month.
This year, online is set to grow by 11.0%, countering the 11.0% decline experienced in 2001. By 2005, US online advertising is expected to be worth $13.5 billion (£9.5 billion).
| US online advertising spend ($bn) | ||
| Spend ($bn) | YoY growth (%) | |
| 1998 | 1.9 | 111.0 |
| 1999 | 4.6 | 142.1 |
| 2000 | 8.2 | 78.3 |
| 2001 | 7.3 | -11.0 |
| 2002 | 8.1 | 11.0 |
| 2003 | 9.2 | 13.6 |
| 2004 | 11.4 | 23.9 |
| 2005 | 13.5 | 18.4 |
| Source: eMarketer, March 2002 | ||
Forecasts comparisons The forecasts above from eMarketer are based on historic data compiled by PricewaterhouseCoopers on behalf of the Internet Advertising Bureau (IAB). It notes that there are many companies and agencies producing online advertising forecasts and that there is often little consensus between them. This is due to differing definitions, methodologies and biases.
For 2002, though, most researchers and brokers are anticipating growth for online in the range of 10-30%. A comparison of the range of forecasts is shown here.
Interactive TV Interactive television (iTV) advertising revenues are also predicted to show strong growth between now and 2005, as shown.
| US iTV advertising revenue forecasts comparisons ($m) | ||
| 2001 | 2005 | |
| Myers Group | 20 | 215 |
| Forrester Research | 127 | 2,622 |
| Jupiter Research | – | 4,500 |
| ABN Amro | 105 | 8,269 |
| Source: eMarketer, March 2002 | ||
Online’s share of total adspend Online’s share of total media spend in the US is set to grow from 2.9% in 2001 to 3.8% by 2004, according to forecasts by eMarketer. This year it is expected to take a 3.1% share.
Compared to the traditional media, online’s growth in 2002 is expected to be pretty strong, according to a consensus of forecasts.
| US 2002 adspend growth forecasts by medium | |||||
| Television | Radio | Newspapers | Magazines | Internet | |
| Myers Group | -0.3 | -2.0 | 1.0 | -2.0 | 12.8 |
| PricewaterhouseCoopers | 11.1 | 9.0 | 5.4 | 8.1 | 13.0 |
| Universal McCann | 4.4 | 0.8 | 0.8 | -1.0 | -14.2 |
| Veronis Suhler | 8.7 | 9.5 | 4.6 | – | 8.0 |
| Zenith Optimedia | 0.3 | 0.6 | -4.0 | -6.0 | 13.0 |
| Average | 4.8 | 3.6 | 1.6 | -0.2 | 6.5 |
Net users worldwide Most researchers agree that the number of internet users will continue to climb steadily over the next few years. As the web continues to improve its reach, online adspend will begin to flow from traditional advertisers looking to interact with consumers and enhance their brands, says eMarketer’s report.
Worldwide, the number of Net users will more than double, from 352 million in 2000, to 709.1 million by 2004, according to the forecasts, shown below.
| Internet users worldwide by region (millions) | ||||||
| 2000 | 2001 | 2002 | 2003 | 2004 | CAGR* 2000-2004 (%) | |
| North America** | 108.1 | 133.4 | 152.0 | 169.3 | 184.5 | 14.3 |
| Europe | 100.9 | 129.2 | 170.7 | 196.2 | 221.1 | 21.7 |
| Asia-Pacific | 123.3 | 145.9 | 168.0 | 205.0 | 232.1 | 17.1 |
| Latin America | 15.8 | 22.0 | 32.0 | 43.4 | 60.6 | 39.9 |
| Africa | 4.1 | 5.3 | 7.2 | 9.0 | 10.9 | 27.7 |
| Total worldwide | 352.2 | 445.9 | 529.9 | 622.9 | 709.1 | 19.1 |
| * compound annual growth rate | ||||||
| ** includes Canada | ||||||
| Source: eMarketer, March 2002 | ||||||