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Online Ad Spend Soaring – Will Hit $106 Billion in 2011 – What Recession? June 25, 2008

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Marketers worldwide will increase their spending for online advertising at a 15% to 20% clip in the coming years, a growth rate that is “phenomenal,” industry research firm IDC said today.

This year, global spending in online ads will reach $65.2 billion, or about 10% of the total advertising market. As marketers continue to recognize the importance of promoting their goods and services online, they will increase their online ad budgets.

In 2011, online ad spending will hit $106.6 billion, accounting for almost 14% of the total advertising market, according to IDC.

Keyword-based search engine advertising will remain the most popular online ad format through 2011, accounting for more than one-third of the online spending.

It will be followed by Web site display ads, such as banners, which will account for more than 20% of the online spending, and then by classifieds, representing almost 19%, according to IDC.

However, rich media ads, like those in video format, will see their spending grow faster, at an average rate of more than a 50%, IDC said.

The U.S. will lead the global market in online ad spending with $45 billion in 2011. But the fastest growing regions will be Central and Eastern Europe and the Middle East and Africa, with average annual growth rates of 42.1% and 29.8%, respectively.

The region where online ads will have the largest portion of the total ad spending pie will be Western Europe, where marketers will devote 18.2% of their budgets to Internet ads in 2011. In Japan and the U.S., the percentages will be 16.3% and 14.6%, respectively.

Today’s leading categories of online ads, adult content and gambling, information, electronics, and computing, will still be the top ones in 2011, IDC said.

Today, the PC is the preferred device for accessing the Internet, but that will change in 2012, when it will be surpassed by mobile devices, IDC said.

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