Internet advertising in the United States will continue to grow
fast even as the current economic woes will lead to a contraction in
ad spending overall, essentially accelerating the transfer of
marketing budgets from the traditional media into the new. During the
forecast period, Internet advertising will grow about eight times as
fast as advertising at large. IDC finds overall Internet advertising
revenue will double from $25.5 billion in 2007 to $51.1 billion in
2012.
The Internet will go from the number 5 medium all the way to the
number 2 medium in just 5 years, making it bigger than newspapers,
bigger than cable TV, bigger even than broadcast TV, and second only
to direct marketing. Video advertising will be the principal disruptor
of Internet advertising over the next five years by attracting the
most new marketing dollars. Its revenue will grow sevenfold from $0.5
billion in 2007 to $3.8 billion in 2012 at a compound annual growth
rate (CAGR) of 49.4%. This growth will take place because brand
advertisers will shift significant amounts of money into these video
commercials, primarily from broadcast television and to a lesser
extent from cable television.
“The size of the online video audience as well as the time it
spends watching video is sure to increase as broadband access
penetration increases, connections become faster, and as more premium content is available,” said Karsten Weide, program director, Digital Media and Entertainment. “What will also drive this trend is that
consumers are starting to realize that, as opposed to TV, Internet
video lets them watch what they want, when they want, and increasingly also where they want.”
Search advertising will remain the one advertising format that
will garner the most revenue over the forecast period in the United
States. This means that for any media company, search must be a key
part of its strategy. Any media company that is not Google cannot
ignore this segment even if Google is towering above all others as
segment leader with about 70% share of the segment’s revenue.
IDC’s recently released study, U.S. Internet Advertising 2008-2012
Forecast and Analysis: Defying Economic Crisis (IDC #212149),
forecasts expenditures on Internet advertising in the United States
for 2008-2012. It predicts the overall volume of spending on Internet
advertising; breaks out spending by advertising format, including
mobile advertising; and also provides ad spend on social networking
services (SNS). Top-line numbers for all major traditional media are
also included.
This article was last modified on January 6, 2023
This article was first published on June 3, 2008
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