Yankee Group says U.S. online advertising market to hit $50.3 billion by 2011

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Boston—The U.S. online advertising market will reach $50.3 billion in revenue by 2011, more than doube the figure for 2007, according to research company Yankee Group, which released its forecast Friday in “The Cowboys Dance On… and On: 2007 Online Advertising Forecast.”

According to the report, the Internet currently accounts for about 20% of overall media consumption in the U.S., but advertisers currently invest only 7.5% of their budgets online. By 2011, nearly 25% of all media consumption will be online, drawing 15% of the advertising budget, according to the forecast.

Yankee Group also predicted that “search will get bigger before it gets smaller.”

“Search has been growing more rapidly than other forms of advertising,” said Daniel Taylor, senior analyst at Yankee Group. “It will continue to grow to about half of the market before we see other forms of ads come into play.”

In addition, the report said, “Don’t say good-bye to the ‘dancing cowboys’ animated ads yet. Low cost per thousand (CPM) ‘dancing cowboys’ ads will continue to drive much of the revenue growth even as high-CPM brand advertisers shift their budgets online.”

—Carol Krol

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