Online Advertising To Reach $50 BillionBy: Mike Sachoff - January 18, 2008
The U.S. online advertising market will reach $50.3 billion in revenue by 2011, more than doubling 2007’s revenue according to a new report by the Yankee Group, "The Cowboys Dance On and On: 2007 Online Advertising Forecast."
The Internet makes up about 20 percent pf overall media consumption in the U.S., but advertisers currently invest only 7.5 percent of their budget online. There is considerable potential for marketplace growth as advertisers bridge this gap. By 2011, close to 25 percent of all media consumption will be online, bringing in 15 percent of the advertising dollars.
The factors leading to continued growth are increased online audiences, the creation of new types of advertising and the development of new publisher business models that help sell interactive advertising. The report points out that even with large online audiences and growing Internet media consumption, advertisers online budgets continue to lag compared to traditional media.
"With internet connectivity nearly ubiquitous, online advertising growth is inevitable," said report author Daniel Taylor, senior analyst at Yankee Group.
"And yet the Internet is still a relatively new digital medium. Steady growth in online advertising will require publishers to invest extensively in new media and advertising product development."