Though US online advertising is forecast to decline 4.6% in 2009––the first drop since 2002––the recovering economy, combined with basic structural changes in how marketers and the public use media, will lead to growth in early 2010, according to eMarketer.
The 2009 online advertising data are revised projections from the previously issued 2.9% decline, forecast in October 2009.
Several factors since October 2009 influenced a revised forecast: Reports from major portals showed either mild growth or sharp downturns through the third quarter of 2009, and research from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) indicated an overall online ad market in decline for the same period.
"Continued softness in key areas keeps driving down classified advertising––formerly the third-biggest online ad format," said David Hallerman, eMarketer senior analyst. "But search ad spending remains relatively steady, and banner ad spending is down by only a small amount."
The 100 largest advertisers are still putting a relatively small share of their measured media budgets into display advertising and holding back from greater online ad investment, which continues to stymie overall market growth, eMarketer said.
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Structural Shifts in Ad Spending Take Hold
The recession has brought into focus the structural changes occurring in the advertising market, as some components of online advertising spending continue to fare significantly better than others, according to eMarketer.
For example, classified ad spending is forecast to decline 30.2% in 2009, while paid search is forecast to grow 2.2%. The overall trend will continue over the next two years, according to eMarketer: Paid search is forecast grow 5.9% annually in 2010, and another 6.6% in 2011; meanwhile, classified ad spending is projected to decline 8.4% annually in 2010, and fall another 5.7% in 2011.
As video moves to the forefront of brand advertising in the digital space, video ad spending will outperform other online formats, with growth rates forecast in the 34%-45% range from 2009 through 2014, according to the forecast.
