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Online Ad Spending to Outpace Overall Ad Market Growth
December 10, 2006
Internet advertising continues to gain on
other ad categories.
ZenithOptimedia forecasts that global Internet advertising
spending will grow by 28.2% in 2007, at the same time
ad spending in other media will grow by only 3.9%
— in other words, online ad spending will grow
seven times faster.
This disparity speaks volumes about the ongoing seismic
shift in the world of advertising. However, the shift
to the Internet among US marketers is even more dramatic.
eMarketer's latest ad spending projections were released
on Wednesday (see Internet Advertising Will Weather
a Sluggish Economy). These put growth in US online
ad spending at 18.9% in 2007, within an entire advertising
industry set to grow by only 1.4%.
ZenithOptimedia also projects that the Internet's
share of worldwide total ad spending will increase
from 5.8% in 2006 to 8.6% in 2009.
The researcher's data show worldwide spending on
Internet advertising exceeding the amount spent on
outdoor advertising this year and surpassing even
radio ad spending in 2009.
The analysts at ZenithOptimedia point out that the
rise of Internet advertising has been dramatic. In
terms of total ad spending, the Internet has overtaken
two long-established media: cinema (which it overtook
in 1997) and outdoor (which it overtook this year)
in the space of only 11 years.
In addition, even in developed markets the Internet
receives a much lower share of ad budgets than the
amount of time consumers devote to it. ZenithOptimedia
describes how, in 2005, consumers in the USA, Japan
and the UK (the top three ad markets) spent 21.9%
of their media time using the Internet, yet advertisers
in those three markets spent only 6.8% of their budgets
online.
ZenithOptimedia states: "We expect the Internet
to take nearly 9% of global adspend by 2009, but experience
from the most developed markets suggests it is heading
for well over 10%. The Internet already attracts more
than 10% of adspend in three markets (Norway, Sweden
and the UK), and by 2009 we expect it to do so in
ten markets (Australia, Canada, Israel, Japan, Norway,
South Korea, Sweden, Taiwan, the UK and USA). The
Internet has its highest share in the UK, where it
will attract 13.5% of adspend this year and 21.5%
in 2009."
Looking at the breakdown of online advertising, the
researchers found that paid search is the largest
single type of Internet advertising, and the gap between
search and display ads is widening. However, display
includes video ads and other innovations that are
exploiting the creative opportunities offered by high-speed
broadband, and still has growth potential. Meanwhile,
classified continues to migrate from print to online.
For another look into the future, read eMarketer's
US Online Ad Spending: Peak or Plateau? report.
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