eMarketer: Shift to online ads speeding up

The credit squeeze has begun to slice off earlier projections, but Internet ad spending continues to rise.

From eMarketer's latest report:

eMarketer projects online ad spending to reach US$42 billion by 2011, more than doubling from the estimated US$21.4 billion this year.

Those numbers are slightly down from eMarketer's previous estimates of US$21.7 billion in spending for 2007 and US$44 billion for 2011.

Under the revised projections, online ad spending for 2007 is expected to increase 26.7 percent from the US$16.9 billion spent last year.

By contrast, advertising spending on all media is only expected to increase 2.1 percent.

"Don't expect any large growth in total media," eMarketer's David Hallerman told InternetNews.com. "The shift away from traditional media is accelerating."

Hallerman cautions that percentage growth changes can be deceptive, as they are bound to taper off as an industry builds mass.

While "Internet's total growth is going to be decelerating," he said, the digital share of the advertising pie will continue to grow for the foreseeable future. Hallerman offered no predictions on how large that share will become down the road.

The study found that search advertising will remain the strongest of digital ad spending through 2011, holding steady around 40 percent. Spending on display ads also is projected to remain at around 20 percent, followed by online classified spending at about 17 percent.

The biggest proportional gainer will be rich media, driven by video ads, which is expected to jump from 8 percent this year to 13 percent in 2011.

Hallerman admitted that eMarketer's estimates may be conservative in areas where businesses models are still developing, and said he expects to revise his projections in rapidly developing sectors like video.

"I think we're going to see some of the largest growth in video ads on televisions stations' Web sites," he said.