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BizReport : Research archives : October 16, 2006

Online Ad Spend Solid for Q3

Yahoo’s warning a few weeks ago that finance and auto advertising would drop in the third quarter of 2006 doesn’t seem to have affected the overall online advertising markets for Q3.

by Kristina Knight

Several analysts say the internet advertising market remains solid. Last week, Lauren Rich Fine, an analyst with Merrill Lynch said the overall US ad spend would be slightly lower than expected, but that online spending would be robust in Q3 (at more than 26% growth) and in Q4 (27% growth). Piper Jaffray & Co. estimate that Q3 will see about a 30% online ad growth. That is on a par with the first half of 2006.

In another Merrill Lynch report, analyst Justin Post estimates that Google captured 60 percent of global search advertising in Q3. The search giant, who recently acquired YouTube, will likely continue gaining in search share as compared to Yahoo!, its closest competitor along with MSN. Search advertising grew about 30% in the third quarter; that compared to 25% for branded formats.

Next week Yahoo and Google are expected to release their Q3 earnings, those numbers are expected to be strong. Earnings from 24/7 Media, ValueClick and aQuantive are also expected to be strong for Q3.

Tags: advertising spending, online marketing, search advertising, search engines, search marketing

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