The Power of Social Media

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Expert Predicts 25% Increase in Online Ad Spending

Robert Coen, senior vice president and director of forecasting for Universal McCann, expects a 25% increase in online ad spending this year over 2005, excluding search (he’s looking for a number around $9.705 billion). Some other forecasters anticipate the figure including search to approximate $20 billion. That would amount to roughly a 26% increase over 2005.

While online spending is surging, total advertising spending for 2006 is anticipated to grow at approximately 5.6% over last year. Retail newspaper spending was down 1% in the first three months of the year and spot radio was down 2%.

There have never been more options for clever advertisers and more will come as entrepreneurs offer people more of what they’re looking for!

Advertising Dollars Are Shifting From TV & Print to Online

During the first half of 2005, U.S. advertising spending online has increased 26% to $5.8b (source: Interactive Advertising Bureau/PricewaterhouseCoopers LLP). Demand is starting to exceed supply and as a result some to the largest portals (Yahoo, AOL & MSN) are sold out months in advance for home page display ads. This trend is partly a factor of the increase in the number of Americans using the Internet and the growth of broadband, which enables the presentation of more compelling ads that require more bandwidth.

This presents an opportunity for smaller, more targeted sites to capture advertising sales they might otherwise have missed. And in the process, savvy marketers will find more cost efficient vehicles to sell their products. All of this will encourage the development of new web portals aimed at better serving consumers’ needs, giving them more of what they are looking for, whether it’s buying a new house or finding the car of their dreams.