Online advertising budgets experienced wave after wave of decreases as the recession wrecked havoc on overall marketing strategies, but new data from eMarketer suggests that period of cooling off is likely over and ad spending will increase across the board over the next four years.
eMarketer predicts that online advertising will total $31.3 billion here in 2011, a 20 percent increase over the roughly $26 billion spent on the medium last year. It will be the start of an overall return to pre-recession growth levels that should continue through 2015.
eMarketer had originally projected 10.5 percent growth.
“The internet has become as fundamental as television to advertisers,” says eMarketer’s principal analyst David Hallerman. “As consumers continue to increase their time spent online and 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.”
The data further reveals that display advertising has already exceeded expectations for the year: advertisers are expected to increase display ad spending to $12.3 billion in 2011, a 24.5 percent increase. Search advertising is also expected to grow by almost 20 percent to $14.4 billion.
However, as marketers increasingly view online ads as a branding tool, display ads will continue to see better growth than search advertisements. And eMarketer predicts that by 2015, display ads will overtake search ads completely in terms of market share.
Reflecting emerging trends with regard to the waning effectiveness of traditional advertising programs like television, eMarketer further estimates that Internet ads will account for one-fifth of the entire U.S. advertising market this year and that by 2015, 28 percent of all U.S. ad spending will be online.
And further adding to the woes of traditional TV advertising is the fact that video is the fastest-growing online ad type, particularly as Google builds on its advertising offerings through the promotional arm of YouTube. eMarketer expects video ad spending to total $2.16 billion this year and by 2013, they are expected to evolve into the third-largest ad format.
Banner ads are still relevant as well, and are expected to total $7.61 billion this year.
Leave us your thoughts and comments below!