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Online Advertising Market Poised to Grow 20% in 2011
August 08, 2011 The US online advertising market is poised for rapid growth this year, with spending expected to exceed $31 billion, according to a new forecast by eMarketer.
The firm estimates online advertising spending in the US will grow 20.2% to $31.3 billion in 2011, up from $26 billion in 2010, when the market grew 14.9%.
“The internet has become as fundamental as television to advertisers,” said eMarketer principal analyst David Hallerman. “As consumers continue to increase their time spent online and as the resurgent economy continues to bolster ad budgets, we’re going to continue to see an influx of dollars toward the internet. More ad formats, such as video, and more channels, especially social media and mobile, are also key contributors to the spending gains.”
eMarketer, which forms its forecast though a meta-analysis of reported revenues from major ad-selling companies, results from its benchmark source, and research estimates and methodologies from dozens of firms that track ad spending, estimates internet ads will account for nearly 20% of all major media ad dollars spent in the US this year, up from a 17% share in 2010. By 2015, online advertising is expected to make up nearly 28% of total US major media ad spending, compared to TV, whose share of total spending is expected to hover around 38% for the next five years.
eMarketer benchmarks its US online ad spending projections against the Interactive Advertising Bureau (IAB)/PricewaterhouseCoopers (PwC) data, for which the last full quarter measured was Q1 2011.
The increase is largely fueled by a surge in spending on display advertisements, which grew faster than eMarketer expected in its previous forecast from December 2010, when the firm estimated US online advertising would grow 10.5% in 2011.
While search advertising still takes the greatest share of online ad dollars by far, display spending is posting solid gains. Total online display ad spending—including online video, banner ads, rich media and sponsorships—has already brought the category in close range of search. This year, US advertisers will spend $14.38 billion on search ads and $12.33 billion on online display, up 19.8% and 24.5%, respectively, over 2010.
Display will continue to grow at a faster pace than search throughout eMarketer’s forecast period, and display spending is on track to surpass search by 2015.
Display’s rise has been supported by marketers increasingly funneling dollars toward banner and video ads. Advertisers spent an estimated $6.23 billion on banner ads in 2010, a figure that will grow to an estimated $7.61 billion—or 24.3% of total online ad spending—this year, eMarketer estimates. By 2015, banner ad spending is expected to reach $11.73 billion.
“High inventory and lower pricing have made banner and video ads increasingly attractive formats for brand marketers, many of which have seen their online ad budgets grow during the past year,” said Hallerman. “The rise of Facebook has been another prime factor in display ad growth.”
Video advertising is growing faster than all other online ad formats, and this year eMarketer estimates online video will surpass rich media in terms of ad spending. US online video advertising spending will grow 52.1% to $2.16 billion, up from $1.42 billion last year, when the video ad market grew 39.6%.
“Marketers increasingly see the internet as a place where brand advertising, especially in the form of video advertising, is effective,” said Hallerman. “Combined with greater targeting and measurement than marketers get with TV ads, the growing consumption of online video has done more to attract brands than any other online ad format.”
Despite its rapid growth, video’s share of overall online ad spending will reach just 6.9% this year. By 2013, however, video is expected to surpass classifieds and directories in market share—putting video behind only search and banner ads in terms of overall online ad spending.
Search advertising is expected to post strong growth this year as well, though its share of the overall market will inch lower as marketers move dollars toward video and banner ads. eMarketer estimates US search advertising spending will make up 45.9% of overall US online ad dollars this year, down from a 46.1% share in 2010. However, more new dollars will go into search this year and next (over $5 billion) than into banners and video combined (less than $4.4 billion).
The rise of display advertising goes hand in hand with a rise in usage of digital advertising for branding. Online advertising, long considered primarily for direct response marketing, still leans in that direction. But branding is increasing in importance as better ad vehicles develop for this purpose and marketers’ dollars are flowing.
This year, eMarketer projects 39.4% of online ad dollars will be devoted to branding—including banner ads, rich media, sponsorships and video. All other ad formats, including classifieds, embedded email ads, lead generation and paid search, are classified as direct response.
Spending on branding-oriented online ads will grow more quickly than direct-response spending throughout the forecast period, and by 2015, 44.4% of online advertising spending will be devoted to branding.
About eMarketer
eMarketer is the go-to authority on digital marketing, media and commerce, offering insights essential to navigating the changing, competitive and complex digital environment. By weighing and analyzing information from different sources, eMarketer provides businesspeople, marketers and advertisers with the most complete view of digital marketing available.
Media Contact:
Clark Fredricksen
Marketing Communications Director, eMarketer
Tel. 212-763-6056
New Forecast Shows Display on Trajectory to Overtake Search
The US online advertising market is poised for rapid growth this year, with spending expected to exceed $31 billion, according to a new forecast by eMarketer.
The firm estimates online advertising spending in the US will grow 20.2% to $31.3 billion in 2011, up from $26 billion in 2010, when the market grew 14.9%.
“The internet has become as fundamental as television to advertisers,” said eMarketer principal analyst David Hallerman. “As consumers continue to increase their time spent online and as the resurgent economy continues to bolster ad budgets, we’re going to continue to see an influx of dollars toward the internet. More ad formats, such as video, and more channels, especially social media and mobile, are also key contributors to the spending gains.”
eMarketer, which forms its forecast though a meta-analysis of reported revenues from major ad-selling companies, results from its benchmark source, and research estimates and methodologies from dozens of firms that track ad spending, estimates internet ads will account for nearly 20% of all major media ad dollars spent in the US this year, up from a 17% share in 2010. By 2015, online advertising is expected to make up nearly 28% of total US major media ad spending, compared to TV, whose share of total spending is expected to hover around 38% for the next five years.
eMarketer benchmarks its US online ad spending projections against the Interactive Advertising Bureau (IAB)/PricewaterhouseCoopers (PwC) data, for which the last full quarter measured was Q1 2011.
The increase is largely fueled by a surge in spending on display advertisements, which grew faster than eMarketer expected in its previous forecast from December 2010, when the firm estimated US online advertising would grow 10.5% in 2011.
While search advertising still takes the greatest share of online ad dollars by far, display spending is posting solid gains. Total online display ad spending—including online video, banner ads, rich media and sponsorships—has already brought the category in close range of search. This year, US advertisers will spend $14.38 billion on search ads and $12.33 billion on online display, up 19.8% and 24.5%, respectively, over 2010.
Display will continue to grow at a faster pace than search throughout eMarketer’s forecast period, and display spending is on track to surpass search by 2015.
Display’s rise has been supported by marketers increasingly funneling dollars toward banner and video ads. Advertisers spent an estimated $6.23 billion on banner ads in 2010, a figure that will grow to an estimated $7.61 billion—or 24.3% of total online ad spending—this year, eMarketer estimates. By 2015, banner ad spending is expected to reach $11.73 billion.
“High inventory and lower pricing have made banner and video ads increasingly attractive formats for brand marketers, many of which have seen their online ad budgets grow during the past year,” said Hallerman. “The rise of Facebook has been another prime factor in display ad growth.”
Video advertising is growing faster than all other online ad formats, and this year eMarketer estimates online video will surpass rich media in terms of ad spending. US online video advertising spending will grow 52.1% to $2.16 billion, up from $1.42 billion last year, when the video ad market grew 39.6%.
“Marketers increasingly see the internet as a place where brand advertising, especially in the form of video advertising, is effective,” said Hallerman. “Combined with greater targeting and measurement than marketers get with TV ads, the growing consumption of online video has done more to attract brands than any other online ad format.”
Despite its rapid growth, video’s share of overall online ad spending will reach just 6.9% this year. By 2013, however, video is expected to surpass classifieds and directories in market share—putting video behind only search and banner ads in terms of overall online ad spending.
Search advertising is expected to post strong growth this year as well, though its share of the overall market will inch lower as marketers move dollars toward video and banner ads. eMarketer estimates US search advertising spending will make up 45.9% of overall US online ad dollars this year, down from a 46.1% share in 2010. However, more new dollars will go into search this year and next (over $5 billion) than into banners and video combined (less than $4.4 billion).
The rise of display advertising goes hand in hand with a rise in usage of digital advertising for branding. Online advertising, long considered primarily for direct response marketing, still leans in that direction. But branding is increasing in importance as better ad vehicles develop for this purpose and marketers’ dollars are flowing.
This year, eMarketer projects 39.4% of online ad dollars will be devoted to branding—including banner ads, rich media, sponsorships and video. All other ad formats, including classifieds, embedded email ads, lead generation and paid search, are classified as direct response.
Spending on branding-oriented online ads will grow more quickly than direct-response spending throughout the forecast period, and by 2015, 44.4% of online advertising spending will be devoted to branding.
About eMarketer
eMarketer is the go-to authority on digital marketing, media and commerce, offering insights essential to navigating the changing, competitive and complex digital environment. By weighing and analyzing information from different sources, eMarketer provides businesspeople, marketers and advertisers with the most complete view of digital marketing available.
Media Contact:
Clark Fredricksen
Marketing Communications Director, eMarketer
Tel. 212-763-6056
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