JPMorgan: More display ad growth in '08

After what Imran Khan, analyst at JPMorgan, calls a “difficult year” for display ads 2008 could yet see more growth due to a tighter supply of ad inventory from major offline media outlets and "better monetization techniques" from online publishers.

This, he says in his recent "Nothing But Net" research, will see CPMs rise by 4 percent during this year and why CPM-based display ad revenue will rise a further 20 percent to $10 billion by 2009.

"In 2007, we saw pretty significant influx of inventory coming from social networks sites like MySpace, Facbeook and e-Commerce sites started trying to monetize their page views,” said Khan. “That drove tremendous amount of new inventory and as a result we saw fragmentation of audiences ... and a divergent shift from premium to remnant inventory."

On the flip side, JPMorgan’s predictions for newspapers weren’t good with ad revenues continuing to fall at faster rates – from a declining rate of 1.7 percent in 2006 to 8.6 percent in 2007.

"You're seeing newspaper-decline rate accelerating, and that's very positive for both search and display advertisement business," said Khan.

Further report data can be found on a recent TechCrunch post.

Tags: ad revenue, CPM, display advertising