Internet advertising to more than double

With the ever-growing presence of Web search engines and the impact they can make in online sales, closely examining and analyzing marketing trends is more critical today than at any other time.

Internet advertising to more than double

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Nov. 8, 2007

Internet advertising in the U.S. is expected to double as a percentage of total media, rising from only a 6 percent share of total media last year, to a bit more than a 12.4 percent share in two years from now.

In about the same period, online spending will nearly triple, rising from $16.9 billion last year to $42 billion in four years from now.

David Hallerman, eMarketer analyst and author of the new report "U.S. Advertising Spending" says that these four milestones mark the change:

First, U.S. Internet ad spending surpassed $5 billion in the second quarter of this year, the largest sum recorded in any quarter according to research from the Interactive Advertising Bureau and PricewaterhouseCoopers. eMarketer projections suggest that, in Q4 2007, spending will leap past the $6 billion mark.

Second, while about 69 percent of the largest U.S. advertisers place smaller budget shares into four traditional media (TV, radio, newspapers and magazines) in 2006 than in 2005, 70 advertisers of the same group have placed larger shares into Internet advertising. Furthermore, 58 decreased their traditional spending share, while increased the Internet share.

Third, even as the credit crunch pulls ad money off the total media table, the Internet looks to be more resistant to economic turmoil. To put the obvious into figures, online advertising contributes more and more to the total ad spending universe every year. That share will be 7.4 percent in 2007, it will approach 10 percent in 2008, and will likely reach at least 13 percent by the end of this decade.

Fourth, data from both eMarketer and TNS Media Intelligence indicate that Internet ad spending this year will be higher than for radio. That is the first time Internet ad spending will be greater than for any of the four traditional measured media.

Overall, the study reveals that the average ad spend per Internet user is also increasing. This year marks the first time that Internet marketers will spend more than $100 to reach each person online.

Additionally, in four years from now, advertisers will be spending nearly $200 per Internet user.

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Source: eMarketer