Online ad spend forecasts cut amid recession fears
- Added:
- Mar 19, 2008
Research firm eMarketer has cut its projection for US online ad spend this year, signalling that economic troubles are likely to be biting into corporate marketing budgets.
The revised forecast by eMarketer calls for US advertisers to spend $25.8bn (£12.9bn) online this year, which compares to its projection of $27.5bn made in October.
eMarketer said it lowered its forecast due to the "foundering" economy and problems social networks are having attracting ad dollars.
However online spending should still grow by 23 percent from 2007 and weather the economic downturn better than spending on other types of advertising, eMarketer added.
Spending growth is then likely to slow in 2009 to about 16 percent, and will not return to growth of 20 percent or more until 2012, eMarketer said.
The growth rate for online ads, which was nearly 35 percent in 2006 and 25 percent last year, is expected to be 23 percent this year.
It will then drop to around 16 percent or 17 percent for a few years until rising to 24 percent in 2012, when online video advertising is expected to boom amid a larger economic recovery, the report says.
The report, titled "U.S. Online Advertising Spending: Resilience in a Dicey Economy," will be released later this week. It reflects 2007 online advertising figures from the major portals, which receive 57 percent of the total spending in the US, according to eMarketer.
In a company statement, eMarketer said: "While a foundering economy will certainly affect online ad spending, accounting for the revised estimate, the Internet will support continued ad spending growth even as other media may falter".