Monday, March 31, 2008

Online Heads for 10% of Total US Ad Spend

MARCH 31, 2008

When the going gets tough…

Sub-prime mortgage meltdowns. Floundering credit markets. Burst housing bubbles. Trillions wasted in war. Gold hitting $1,000. Tumbling stock markets. Falling payrolls. Oil at record highs. The dollar at record lows.

Is it any wonder that—even in a year of the Olympics and a presidential election—US advertising is struggling?

Almost all US advertising, anyway.

In the midst of the doldrums, like the Energizer Bunny, Internet advertising is still going strong.

”Even if its rate of growth is declining slightly,” says David Hallerman, eMarketer Senior Analyst and author of the new report, US Online Advertising: Resilient in a Rough Economy. “US online advertising is proving to be far more robust than other media channels.”

eMarketer predicts that this year online advertising will grow to nearly $28 billion and account for 8.8% of total US ad spending.

”Even more impressively,” says Mr. Hallerman, “in 2009 online advertising will reach $30 billion and account of fully 10% of all US ad spending.”

It is important to note that even as growth rates decline through 2009, overall Internet ad spending increases will remain in positive territory, the mid-teens or higher through 2011.

”This growth, even if less than before, will surpass all other major media,” says Mr. Hallerman.

Don’t make the mistake of thinking the Internet is impervious to downward economic pressures, however.

”Whatever label you slap on the current economic climate, US ad spending both online and offline will be shaped by overarching business trends,” says Mr. Hallerman. “While Internet ad spending is in no way immune to a recession’s impact, it is more resistant to ad spending cutbacks than are other media.”

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