YANKEE GROUP FORECASTS THAT INTERNET advertising will more than double to $50.3 billion in 2011 from $21.7 billion last year, driven by technology investments that will boost online ad performance.
Internet Advertising Projections
While the size of the U.S. Internet audience will level off in the next few years, ad dollars have yet to catch up with the growth in online media consumption, according to the Yankee study. The research firm estimates that the Internet accounts for about 20% of overall media consumption, but only 7.5% of ad budgets.
In three years, that ad share is expected to double to nearly 15%, closing the gap with television. Yankee predicts marketers will spend three-quarters as much per online user as TV viewer ($244 versus $313) by 2011. In 2006, advertisers spent less than one-third as much online as TV per user ($89 versus $276).
Helping drive the online shift will be improved ad targeting, an array of new ad platforms, and publishers' increased focus on "yield management"--maximizing revenue without upgrading ad inventory.
"We've thought of this as an industry in which advertisers are the ones in the driver's seat, but it's clear that publishers have a lot they can do as well," said Daniel Taylor, senior analyst at Yankee Group, which predicts a 24% annual growth rate for online advertising through 2011.
