Forecasts show increase in ad spending, led by online

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Ad spending will be on the rise over the next three years, according to several recent forecasts by research firms and media agencies. They all predict growth in overall spending, led by Internet advertising.

Last week, research firm eMarketer revised its forecast for U.S. online ad spending to $25.8 billion this year, an increase of 13.9% over last year. This is up from eMarketer's May forecast of 10.8% growth in U.S. online ad spending for the year.

Next year, online ad spending is expected to be up 10.5%, followed by double-digit growth every year through 2014, when spending will reach $40.5 billion, eMarketer projects.

According to the forecast, online advertising will make up 15.3% of total media spending this year and grow to 21.5% of total media spending by 2014.

“The digital ad business is increasingly just the ad business, without separate silos for interactive media,” said David Hallerman, principal analyst at eMarketer and author of the report. “Marketers' economic concerns are leading them to spend more for online advertising."

eMarketer also issued new forecasts for spending on specific online ad formats, including video ads (up 39.5% this year); banner ads (up 16.2%); and rich media ads (up 4.6%).

Also last week, ZenithOptimedia said global ad spending will increase 4.9% this year and will grow at an annual rate of between 4.6% and 5.2% over the next three years, according to its “Advertising Expenditure Forecasts—December 2010.”

In the U.S., ad spending will increase 2.2% this year and be up by a projected 2.4% next year, according to the report.

“Although recovery has begun, the economy has still not returned to its pre-recession level, and neither has advertising spending,” ZenithOptimedia said in the report. “However, most of the large financial, retail and automotive spenders have returned to the marketplace.”

In the U.S., the media categories with the highest ad spending growth this year include Internet (up 13.5%), television (up 7.4%) and outdoor (up 3.0%).

Categories with the largest declines this year are newspapers (down 10.0%), b-to-b magazines (down 6.0%) and radio (down 2.6%), ZenithOptimedia said.

In “2011 Advertising Forecast,” media forecaster MagnaGlobal projects that global ad spending will be up 6.9% this year and up 5.4% next year.

In the U.S., ad spending will be up 3.9% this year and rise a projected 2.4% next year, according to MagnaGlobal.

Ad growth will be led by Internet advertising, which is projected to be up 12.5% next year and up an average of 10.6% annually through 2016, according to the report.

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