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Forecast: 2005 Online Ad Spend Will Rise 30%

Internet advertising is poised to continue its 2004 momentum with strong growth in 2005, according to a new ad-spending forecast.

Jack Myers, a media forecaster, last week released his 2005 ad-spending report, which has online advertising growing 30 percent next year. This would follow a 25 percent gain in 2004.

Overall ad spending is forecast to grow 4.8 percent.

Myers pegs 2004 Internet ad spending at $7.8 billion, or 4.3 percent of total ad spending. In 2005, he expects online advertising to generate sales of $10.2 billion, or a 5.3 percent share of total ad spending.

Search marketing will continue to drive the market's growth, the report said, though Myers anticipates search spending will moderate slightly to a growth rate of 25 percent to 30 percent. Search spending grew about 40 percent in the first half of 2004, according to the Interactive Advertising Bureau.

Display advertising should continue to perk up in 2005, Myers said. He expects major portals such as AOL, MSN and Yahoo to be the main beneficiaries, along with traditional media heavyweights like The New York Times, Condé Nast and local newspapers and TV stations.

Older forms of online advertising such as pop-ups and traditional banner placements will see as much as 25 percent increases in spending. Myers expects spending on emerging formats like video advertising to grow up to 40 percent.

Myers bases his forecast on a survey of 225 ad industry executives.

Brian Morrissey covers Internet marketing for DM News.com. To keep up with the latest Internet marketing news subscribe to our free e-mail newsletter by visiting //www.dmnews.com/cgi-bin/newslettersub.cgi

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