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U.S. online advertising spending will almost double by the year 2012, with search and display advertising accounting for most of the expenditures.

"Online Advertising To Reach $35 Billion"

Total online advertising spending will increase from $19.9 billion in 2007 to $35.4 billion in 2012 according to JupiterResearch, "US Online Advertising Forecast, 2007-2012" report.

Factors that are influencing online advertising spending include strong growth in display inventory, increased paid click volume and improved targeting technology.

"The rapid growth of social sites online has accounted for considerable growth and availability of inventory now available to advertisers," said Emily Riley, Analyst at JupiterResearch.

" Today, inventory on social sites is fulfilled largely through ad networks and contextual advertising, but as they mature, they will begin to use tactics such as behavioral targeting that allow for better monetization of their inventory."

JupiterResearch found that static image and text advertising will be the most popular display formats in 2007, making up more than two thirds of online display revenue. Growth of text and static ads this year is because of the large increase in remnant impressions on social networking sites.

"This is a time of considerable opportunity for online media properties, interactive advertising agencies, and marketers," said David Schatsky, President of JupiterResearch.

"Making the most of the opportunity, though, requires tracking evolving consumer behavior closely, employing appropriate targeting and measurement technologies, and a willingness to experiment with evolving formats and tactics."