US internet advertising to reach $22.3 billion by 2009

MUMBAI: In 2005, US Internet advertising spending will surpass $10 billion for the first time, shooting past that mark to $12.9 billion, according to eMarketer projections.

That number more than doubles 2002's $6.0 billion figure. Four years from now, companies will spend nearly $10 billion more on Internet ads, reaching $22.3 billion in 2009.

Four basic trends support the continued growth of Internet ad spending:

Larger ad budgets overall

Shifts in ad budgets from other media to the Internet

More companies including the Internet as part of their campaigns

Increased prices for both branding ads (display and rich media) and

direct response vehicles (such as paid search



eMarketer's new report, Ad Spending Trends: The Internet and Other Media, explores the changing landscape of media spending -- online and off -- and the dynamics of how the two are affecting one another.



"The spending growth is impressive, but shouldn't come as too great a surprise. These dazzling increases are possible in part because growth came from such a small base. And in the last few years the Internet has truly become a mainstream medium," said eMarketer senior analyst and author of the report David Hallerman.

According to quarter-by-quarter historical data from the Interactive Advertising Bureau and PricewaterhouseCoopers, US Internet ad spending has increased in eight of the last nine quarters. And eMarketer projects continued gains through 2005, with fourth-quarter spending hitting a record $3.8 billion.

"To call this advertising market 'hot' implies it's a fashion that might turn slack at any moment. These yearly and quarterly ad spending gains point to a sea change in media usage among marketers, reflecting how the Internet has become an essential element of daily life for more and more individuals," added Hallerman.

Some of the key questions addressed in the "Ad Spending Trends" report:

Where is the money coming from to support increased Internet advertising?

When will the internet's share of total media spending surpass the five per cent mark?

How long can Internet advertising keep increasing by 20 per cent - plus each year?

What trends will most influence total media ad spending?

Which companies are investing the most ad dollars in which media?

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