US online adspend growth rates are projected to reach 26.8% and 15.1% in 2006 and 2007 respectively, according to a new report from eMarketer.
Even as spending growth subsides, continued positive gains are forecast to push US online ad spending over $21 billion in two years and past the $25 billion mark by the end of 2010.
eMarketer says that in the US, for the foreseeable future, online adspending will continue to carry overall advertising spending, almost making up for shortfalls in other media.
Ad spending shifting from other media, notably broadcast television and newspapers, to the internet will play a part in the sustained growth of internet ad spending, as will increasingly large online ad budgets as companies grow more accustomed to various online formats and increasingly seek the audience found on the web.
In addition says eMarketer, higher prices for both branding ads and direct response vehicles, and branding objectives becoming increasingly relevant online will also help to sustain growth in the sector.
| US Ad Spending Growth Rates for Total Media, Online Advertising and Total Media Without the Internet 2005-2006 (%increase/decrease v prior year) |
| |
Total Media |
Internet |
Total Media Without Internet |
| 2005 |
2.8% |
30.3% |
1.7% |
| 2006 |
3.7% |
26.8% |
2.5% |
| 2007 |
1.4% |
15.1% |
0.6% |
| 2008 |
3.0% |
17.5% |
2.0% |
| 2009 |
-1.9% |
9.8% |
-2.8% |
| 2010 |
-1.4% |
6.8% |
-2.1% |
David Hallerman, eMarketer senior analyst and the author of the new US Online Ad Spending: Peak or Plateau? report, said: “Internet ad growth won’t be able to maintain the historically high 30%-plus levels of the past two years, but that is not necessarily bad.
“While online spending increases over the next four years will remain sound, especially in contrast to the four other major measured media, television, newspapers, magazines and radio, it will tail off for several reasons.
“These include a deteriorating economy overall and a maturing market that cannot sustain annual 30%-plus growth rates.”
A recent study from JupiterResearch said that online ad spend will reach $15.7 billion in the US this year and $25.9 billion by 2011 (see Online Adspend To Reach $25.9 Billion By 2011).
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