July 19th, 2011

The Future of Online Ad Spending

Privacy Trap

Now it doesn’t take a rocket scientist to realise that internet advertising is going from strength to strength but many will be surprised by the new predictions from analyst firm eMarketing. The firm estimates that spending on online ads will hit $50 billion by 2015, that’s almost double the spend of 2010. The prediction comes a month after eMarketer nearly doubled its estimated increase for online ad revenues for 2011 to 20.2%, thanks to a surge in display advertising.

There are many factors for the steady growth of online ad spending. One highly significant factor is the continued rise of video advertising, which gives brand marketers the familiar messaging medium of TV combined with online’s targeting and measurement capabilities. According to eMarketer, Video will continue to be the fastest-growing format in online advertising. Spending for video ads hit $1.42 billion in 2010, but will reach $7.11 billion in 2015. That’s because video “generates greater audience attention than other digital ad formats,” says David Hallerman, eMarketer’s principal analyst. “Still, its influence far outpaces its ad dollars”.

eMarketer’s figures are by no means the only ones. The IAB reported a 23% jump in online advertising revenues in the first quarter of this year. The IDC also estimated that global online ad spending grew 14.3% in Q1. Online spending is far outpacing increases in traditional advertising.

Online marketing continues to be dominated by the big five ad-selling companies and strong annual revenue growth at Google, Yahoo, Microsoft, AOL and Facebook, will bring them 68% of 2011’s total online ad spending. “Most marketers will spend at least a portion of their ad budgets with those five companies,” said Hallerman. “However, many marketers can often cost-effectively use a blend of ad networks and direct ad buys from smaller sites to improve their campaign’s reach—a process that can sometimes be more complex than buying ads from just a handful of larger sites. Buying from smaller sites can also help marketers maintain their presence within an industry, such as entertainment or B2B.”

So look out for an increasing amount of companies using an aggregated approach, which enables them to make use of a variety of networks in order to optimise their reach.

Read more: http://trap.it/93qJ65


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