Report Forecasts Online Ad Rebound in 2003

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After two straight years of decreasing sales, U.S. online advertising will begin to recover next year, according to a report released yesterday from eMarketer.

Called "Interactive Marketing: Stats, Strategies and Trends," the report states that 2003 spending will rise slightly to $6.7 billion, up from $6.38 billion this year.

The rebound is expected because of several factors, including traditional marketers devoting larger slices of their ad budgets to online advertising as well as a general easing of the economic recession.

By 2005, online ad expenditures will hit $8.1 billion, according to the report, though that is still less than 2000's $8.23 billion.

"The last two years were a disaster for online advertising," said David Hallerman, senior analyst at eMarketer. "The fact that 2003 is going to be a growth year, even a small one, is good news."

Hallerman said that even during the downturn in online ad spending, when many types of online ads posted losses, positive results came from three vehicles: keyword searches, classifieds and rich media.

"The great news here, though, is the long-term projection," he said. "Beyond next year, online ad spending will continue to show steady growth, going to 7.5 percent in 2004 and reaching a healthy 12.5 percent growth rate in 2005."


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