Online Ad Spending to Increase in 2010

US online advertising spending is set to drop in 2009 for the first time since 2002. eMarketer estimates online ad spending will be down 4.6%.  However, the slowly recovering economy, combined with basic structural changes in how marketers and the public use media, will lead to Internet ad spending growth in early 2010. Consumer Spending logo

The economic cycle has reached bottom—at least for the online ad industry,” said David Hallerman, eMarketer senior analyst and author of the new report, “US Ad Spending.” “While spending in the first three quarters of 2009 fell by 5.3%, according to the Interactive Advertising Bureau and PricewaterhouseCoopers, eMarketer’s estimates indicate a smaller loss during Q4, of 2.5%.”

The various components of online advertising react differently to cyclical and structural changes. While one format might show relatively healthy growth in the recession, another suffers due to the same economic climate. For example, paid search will grow by 2.2% in 2009, while classified ad spending will decline by 30.2%. Even during 2010 and 2011, eMarketer projects search will continue to grow at mid-​single-​digit rates, while classified spending will decrease again both years.

Video ad spending growth will far outpace any other online format, running in the 34% to 45% range from 2009 through 2014. These extremely high growth rates are the result of video ads moving from the sidelines to center stage, becoming the main form of brand advertising in the digital space.

"US Ad Spending," conducted by eMarketer, December 11, 2009.  Website: www​.emarketer​.com.