Online ad spending to reach $18.9 billion by 2010

August 8, 2005

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In five years from now, online advertising is expected to reach $18.9 billion, compared with the $9.3 billion at the end of last year, according to research recently conducted by Jupiter Research.

Jupiter also expects search engine advertising will generate more revenue than display advertising.

Online display advertising is forecast to increase at a 7 percent compound annual growth rate, whereas search is expected to increase at a 12 percent rate.

Classified advertising is forecast to grow at a nearly 10 percent rate, reaching $4.1 billion in 2010. Jupiter expects advertisers to take advantage of continuing broadband growth by using rich and streaming media ads: Rich media spending is expected to grow at a 25 percent rate (to $3.5 billion), and streaming media at a 30 percent (to $943 million).

According to Jupiter, publishers' revenue growth will come from several sources, including direct sales and network revenue-sharing arrangements. This year, revenue from ads priced on a performance basis will surpass that of ads sold on an impression basis. Much of this performance inventory will come from network providers, which are using targeting to provide better results for publishers.

"Publishers are in a good position right now," said JupiterResearch VP and Research Director David Card. "Not only can they monetize their non-premium inventory, but they can strategically choose the network providers they feel can generate the most yield from that inventory."

Jupiter released its "2005 Online Advertising Forecast" today at the Search Engine Strategies Conference & Expo.

Source: Marketing Vox

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