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The Daily Stream

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Online Ad Spending Set to Break Records

January 3, 2011 // By: Stream Companies

Peaks in spending expected each year through 2014

After 2009, US online ad spending will increase by 13.9% in 2010, reaching a record $25.8 billion. eMarketer has projected that internet ad spending will hit new heights in the following four years, passing $30 billion in 2012 and breaking the $40 billion mark in 2014.

As for 2010, “A spending peak in Q4 is likely, primarily because Q4 has been the biggest quarter for US online ad spending every year but one since 1999,” said David Hallerman, eMarketer principal analyst and author of the new report, “US Ad Spending: Online Outshines Other Media.”

eMarketer expects us to see double-digit growth in online advertising for five consecutive years. The internet is the only major ad medium that will experience annual spending increases this high.

Hallerman spoke on the growing amount of time spent online by individuals in the US. “Simply put, marketers increasingly know that to reach their target audience, they need to advertise more online” said Hallerman. 

Online advertising is recovering more rapidly than the overall economy, which is seen by online gain in share of GDP. Internet ad spending contribution to GDP increased steadily from Q3 2003 to Q1 2008. After the recession and the overall decline of national GDP, the online ad spending share of GDP in Q3 2010 saw an increase of 11.66% year over year.

In contrast, total media ad spending is less robust. Ad dollars toward all major media will increase by only small amounts from 2010 through 2014, with an average annual growth rate of 2.9%.

For more information on online advertising trends and information, please contact us at StreamCompanies.com.

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