Global internet advertising to hit US$106bn

26 Jun 2008

The projected amount of worldwide spending on internet advertising is expected to hit US$65.2bn in 2008, representing 10pc of all ad spending across all media.

IDC forecasts that the digital ads marketplace is set to grow by between 15pc and 20pc a year to reach US$106.6bn, or 13.6pc of total global ad spend.

“Compared to more mature types of advertising, internet advertising is growing at a phenomenal rate,” said John Gantz, chief research officer at IDC.

“But internet advertising is still relatively new and growing from a much smaller base. By the end of the forecast period, spending for internet advertising will trail direct mail – the third-largest form of advertising – by more than US$30bn, while spending on TV and print ads will each be nearly twice as great as for online ads.”

Gantz said the long-term opportunity for internet advertising can be seen in the disparity between per capita spending.

“Total advertising revenues equate to more than US$105 per inhabitant of the planet, while internet advertising revenues are less than US$50 per active internet user.”

IDC said keyword ads will remain the dominant type of internet advertising throughout the forecast period, capturing more than a third of annual online ad spending worldwide.

Display ads will be the next largest type of internet advertising, capturing more than 20pc of worldwide spending annually through 2011, followed by classified ads with nearly 19pc of all online ad spending per year.

Spending in both categories will be pressured by rich media ads, which are expected to grow at a compound annual growth rate (CAGR) of more than 50pc during the 2007-2011 forecast period.

“Marketers already recognise that online advertising must be incorporated into any comprehensive ad strategy. This will continue to drive growth in online ad spending well beyond the forecast period,” said Karsten Weide, programme director, digital media and entertainment at IDC.

“However, there is still a lot of experimentation underway within the category as marketers seek the optimal mix of ad types to reach their target audience. This will fuel spending for all types of online ads.”

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years