Indiantelevision.com Team

(31 May 2008 2:30 pm)

MUMBAI: Internet advertising in the US will continue to grow even as a contraction in the overall ad spending is expected due to the current economic woes, said a IDC study.

According to the study titled U.S. Internet Advertising 2008-2012 Forecast and Analysis: Defying Economic Crisis, the marketing budgets will get transferred from the traditional media to the new.

During the forecast period, Internet advertising will grow about eight times as fast as advertising at large. IDC states that the overall Internet advertising revenue will double from $25.5 billion in 2007 to $51.1 billion in 2012.

IDC predicts that the Internet will move from the number 5 medium to the number 2 medium in just 5 years, making it bigger than newspapers, cable TV, broadcast TV, and second only to direct marketing.

Video advertising will be the principal disruptor of Internet advertising over the next five years by attracting the “most new marketing dollars”. Its revenue will grow seven fold from $0.5 billion in 2007 to $3.8 billion in 2012 at a compound annual growth rate (CAGR) of 49.4 per cent. This growth will take place because brand advertisers will shift significant amounts of money into these video commercials, primarily from broadcast television and to a lesser extent from cable television.

"The size of the online video audience as well as the time it spends watching video is sure to increase as broadband access penetration increases, connections become faster, and as more premium content is available. What will also drive this trend is that consumers are starting to realise that, as opposed to TV, Internet video lets them watch what they want, when they want, and increasingly also where they want," said Digital Media and Entertainment program director Karsten Weide.

Search advertising will remain the one advertising format that will garner the most revenue over the forecast period in the US. This means that for any media company search must be a key part of its strategy.

IDC is a provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets.