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BizReport : Advertising archives : May 20, 2010

Optimism reigns as 2010 online ad spend forecasts revised

As marketers move budgets online, Internet ad spending in the U.S. is expected to increase by over 10% this year, according to eMarketer.

by Helen Leggatt

The movement of money from print and radio budgets into online advertising and video coffers will continue this year predicts eMarketer. Ad spending has already been reported to have risen 7.5% in Q1 of this year and is now expected to hit 10.8% by year end - almost double the figure predicted at the end of 2009.

Online video will witness the biggest jump in spend, says eMarketer, rising nearly 50% on last year to almost $12.4 billion. Search follows rising 15.7% compared to 2009, to almost $12.4 billion and increases will be seen in banner ad spending (8.2%), lead generation (5.5%), sponsorships (4.9%) and rich media (4.7%).

However, spending on email will decrease 5.4%.

"Overall, the U.S. economy is recovering a bit sooner than last year's data led us to believe," said David Hallerman, eMarketer senior analyst. "For example, not only did the GDP increase by 3.2% in Q1 2010, but there was a corresponding 3.6% gain in personal consumption expenditures."

"And greater consumer activity is one of the prime motivators for greater advertising spending," he added.

eMarketer predicts total online ad spending growth to continue through 2014, with 2011 up 8.4%, 2012 up 12.1%, 2013 up 8.9% and 2014 up 9.3%.

They aren't the only outfit revising their projections. The IDC projected U.S. online ad spending to rise by 12.6% by the end of this year, it has now raised that number to 19%. The revision "follows a string of surprisingly strong numbers for all segments of online advertising, even display, which had been in decline for the past two years" reports PaidContent.

Tags: ad budgets, ad spend, online advertising, online marketing

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