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Sunday, July 24, 2011

The Future of Online Advertising Spending

As the Internet revolution continues to take the world by storm, the advertising industry continues to change as a result.  Market analysts predict that spending on online advertising in the US will reach $50 billion by the year 2015. 
Online ad spending grew 20 percent last year thanks to a sharp increase in display advertising.  According to a recent article on paidcontent.org, display advertising is the fastest growing segment of the Internet ad market showing 16.4 percent growth last year.  Paid search advertising is also growing rapidly at an average of 14.4 percent per year.
Videos in general are having a profound impact on the shape of the Internet. According to another recent article found on mashable.com, spending on video ads reached $1.42 billion last year.  David Hallerman (eMarketer’s principal analyst) attributes this growth to the fact that, “video generates greater audience attention than any of the other digital ad formats.”  As the world’s networks continue to expand and connection speeds improve, we will continue to see and increase in video advertising.
Another segment of the Internet market that is rapidly growing and driving the growth of online marketing is the mobile market.  The proliferation of smart phones and tablets is changing the world, as we know it.  JP Morgan analyst Doug Anmuth said in a paidcontent.org article that mobile will be the single biggest factor accelerating web growth in the coming years.  The mobile ad market is expected to double this year and is on pace to top $1.2 billion.
In the past, the small amount real estate on phone screens and mobile connection speeds presented obstacles and limited the capabilities of advertisers.  However, in the future, we can look forward to faster mobile data delivery from next-generation networks that will increase connection speeds ten times over by the year 2015.  The online advertising industry will also benefit from the growing popularity of smart phone and tablet devices.  The increase in screen size and functionality of these new devices ultimately means infinitely more possibilities for advertisers.