US Online Adspend To Almost Double By 2012

Major drivers fuelling this advertising spending include explosive growth in display inventory, increased paid click volume, and better targeting technology.

Emily Riley, analyst at JupiterResearch, said: “The rapid growth of social sites online has accounted for considerable growth and availability of inventory now available to advertisers.

“Today, inventory on social sites is fulfilled largely through ad networks and contextual advertising, but as they mature, they will begin to use tactics such as behavioural targeting that allow for better monetisation of their inventory.”

JupiterResearch found static image and text advertising will be the two most popular display formats in 2007, comprising over two thirds of online display revenue. Growth of text and static ads this year is due to the massive increase in remnant impressions available across social networking sites.

However, new publishers will continue to improve their advertising mix, and will shift towards more lucrative rich media and video formats over the next few years.

David Schatsky, president of JupiterResearch, said: “This is a time of considerable opportunity for online media properties, interactive advertising agencies, and marketers.

“Making the most of the opportunity, though, requires tracking evolving consumer behaviour closely, employing appropriate targeting and measurement technologies, and a willingness to experiment with evolving formats and tactics.”

A recent report from IDC said that worldwide internet advertising revenue will grow from $16.9 billion in 2006 to $31.3 billion in 2011 at a compound annual growth rate (CAGR) of 13.5% (see Internet Ad Revenue To Reach $31.3 Billion).

At the start of June, a report from IAB Europe revealed that online advertising spend in Europe doubled last year to £4.5 billion (see European Internet Adspend Doubled In 2006).