Report: Online ad spend will slow down this year

Most forecasts are expecting another huge gain for online advertising in 2007 as more consumers go online for news, information and great buys. eMarketer, while still in the middle of the forecasts, doesn't agree with that trend and is forecasting an overall advertising slowdown this year.

by Kristina Knight

Scott Symonds, executive media director at digital agency AKQA disagrees with the eMarketer report, saying his company expects larger gains this year. "I think we'll certainly stay in the 20% to 30% range in 2007," he said (via MediaPost).

But eMarketer analysts are sticking by their report, saying even though many online advertising segments like automotive will show an online gain, because of cutbacks in other areas - like print or television advertising - there will be an overall slowdown in advertising growth to only about 19%. After three years of 30% ad gains, this will be quite a difference.

The online ad spend is expected to hit $36.5 billion (11.3% of the overall ad spend) by 2011. That is up from $6 billion (5.8%) in 2006. Paid search will be the backbone of online spending for the foreseeable future, but online video is forecasted to begin gaining ground on search. Paid search is expected to bring in $8 billion this year while rich media (online video, display ads, etc.) is expected to hit $2.1 billion. Better targeting and tracking models will be responsible for the gains in rich media over the next five years, according to the study.