Media News - Tuesday, June 03, 2008

Web advertising to ‘defy’ economic crisis

Experts predict that internet advertising in the US will continue to 'grow fast' in the face of an economic downturn that will force a reduction in overall ad spending. IDC forecasts that current economic conditions will accelerate the transfer of marketing budgets from traditional to new media. Internet advertising will grow about eight times as fast as advertising at large between 2008 and 2012, according to the analyst firm, while revenue will double to USD 51.1bn. This growth means that the internet will go from the number five to the number two medium in just five years, making it bigger than newspapers, cable TV and broadcast TV and second only to direct marketing. Video advertising is expected to be the principal disruptor of internet advertising over the next five years by attracting the most new marketing dollars. This revenue will grow sevenfold from USD 500m in 2007 to USD 3.8bn in 2012 at a compound annual growth rate of 49.4 per cent. IDC puts this expected growth down to brand advertisers shifting significant amounts of money into video commercials, primarily from broadcast television and to a lesser extent from cable television. Search advertising, according to the research, will remain the one format that will garner the most revenue over the forecast period in the US. IDC study: US Internet Advertising 2008-2012 Forecast and Analysis: (VNU Net)

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