Online Advertising Spending Will Top $25 Billion for 2010

On December 10, 2010, wrote:

Online advertising buys in the U.S. are poised to exceed $25 billion in 2010.

Growing even more rapidly than China’s booming economy, online advertising revenue has surged throughout 2010 – and this rapid growth rate is projected to last at least for the next several years.

Industry trade paper Adweek reports that online advertising buys in the U.S. are poised to exceed $25 billion in 2010. According to revised numbers from online research firm, eMarketer, the year-over-year increase in online advertising is forecast to come in at 13.9 percent, after all is said and done over the holiday season. Total revenues will total $25.8 billion by the end of the year, they predict.

eMarketer raised its estimates for U.S internet advertising several times over the course of the year, Adweek reports. At the beginning of 2010, eMarketer forecast modest growth (i.e., modest growth, that is, in terms of online advertising) of 5.5 percent. That estimate had doubled to a projected 11 percent growth rate by May, and has grown from there.

The latest revision of eMarketer’s online ad spending estimates is a testament to how robust the Internet marketing sector has become, as advertising has continued to shift from traditional print, radio, and television media platforms. The rapid growth of online advertising targeted to the booming mobile market – particularly targeted local mobile search, as seen by the $6 billion Google reportedly bid for GroupOn – is, no doubt, a driver of this continuing rapid growth, even as the U.S. slowly pulls itself out of the recession.

Mike Shield, writing in Adweek, reports that, “the Web’s relatively low cost compared to other media, coupled with its reputation for trackability, may be propelling more dollars to the medium during the prolonged downturn.”

eMarketer is also forecasting continued robust spending on online ads going forward. It predicts that online advertising spending will increase a further 10.5 percent in 2011, and forecasts continuing “double-digit spending growth in every year through 2014 with revenue netting out at $40.5 billion.”

It will be interesting to see whether these numbers will also have to be revised upwards as retailers, manufacturers, and service firms continue to reach out to Internet and mobile audiences to help them grow their way out of the drawn out economic slump we are looking at.

“It may seem ironic,” notes eMarketer analyst, David Hallerman, “but marketer’s economic concerns are leading them to spend more for online advertising.”

About the author: James Barry covers online marketing and related topics for Toronto-based SEO firm, Wolf21.com.


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