Online ad spend to grow 20% in US this year


Video remains the fastest-growing format while search gains most new dollars: Online ad spend is returning to pre-recession growth levels, with steady increases projected through 2015 as marketers continue to invest more in digital channels. eMarketer expects US online ad spend to reach $31.3 billion this year, a 20.2% increase over 2010 spend. By 2015, nearly $50 billion will be spent on online ads.

However, while the spend keeps increasing in digital, the rate of change is expected to consistently drop all the way through 2015:

US Online Ad Spending, 2010-2015 (billions and % change) 

eMarketer principal analyst David Hallerman says as a 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.

Online video ads continue to be the fastest-growing format, with an increase of more than 52% predicted this year. Online video’s growth is still coming from a fairly small base, worth $2.16 billion this year. But by 2013, video ad spending will outstrip classifieds and directories, making it the third-largest online ad format. Spending on sponsorships is rising quickly as they experience a resurgence due to branding-oriented campaigns.

High inventory and lower pricing have made banner and video ads increasingly attractive formats for brand marketers. The rise of Facebook has been another prime factor in display ad growth.

US Online Ad Spending Growth, by Format, 2010-2015 (% change) 

Search will continue to take the lion’s share of ad dollars throughout the forecast period, and eMarketer predicts search ad spend will reach $14.38 billion this year. Banners, with $7.61 billion in spending in 2011, will represent nearly a quarter of online ad spend.

RBR-TVBR observation: Another big factor influencing online spend is the rapid rise of deal-of-the-day advertising via sites like GroupOn and Living Social. While all of these gains may be perceived to come from traditional media’s pockets, remember, the bottom lines of radio and television broadcasting companies does include their online and website revenues. Those are growing as well as internet-only plays.