Online Advertising Is Growing Steadily

    August 10, 2004

Online advertising will have reached a new high by year’s end, the latest eMarketer report predicts. The firm says that by the end of 2004 will be the fourth straight year of double-digit growth.

The report, titled “Ad Spending in the US, Online & Offline,” projects online advertising spending will reach $9.1 billion this year, topping the previous high set in 2000 by $1 billion.

“The interactive ad industry is maturing,” said Senior Analyst David Hallerman, author of the report. “Research shows that high-speed Internet users spend more time and money online. With broadband usage reaching critical mass, companies are now investing more in paid search and rich media advertising to reach this valuable target audience.”

“The IAB/PricewaterhouseCoopers Internet Ad Revenue Report has become the industry standard for revenue reporting,” said Greg Stuart, President and CEO, Interactive Advertising Bureau. “It’s the most reliable benchmark for such projections.”

eMarketer projects online ad spending will top $11 billion by 2005.

Though paid search leads all formats among marketers online, accounting for nearly 40% of online ad spending, eMarketer predicts that rich media will see a higher growth rate this year (64%) as more companies look to invest in online branding opportunities.

“High speed connections improve the online experience, enabling the use of more complex graphics, allowing access to content on-demand and generally making the Internet more useful in every-day life,” Hallerman said.

The money to fund increased online ad spending, according to industry leaders quoted in the report, will come from budgets for newspaper and network television advertising as well as overall increases in ad budgets. eMarketer sees total media in the US rising by 7.7% in 2004.

Jeremy Muncy is a staff writer for