08 August 2000

Unveiling its respected annual forecast, investment banking firm Veronis Suhler predicts continued rapid growth of the internet as an advertising medium. However, the current growth rate is seen as short-term and unlikely to impact too adversely on traditional media.

Overall expenditure by advertisers grew during 1999 grew 9.1% to $165 billion and is forecast to continue the trend by 8.6% year-on-year to 2004 when it will top $249 billion. This, says the report, "will be driven largely by internet advertising, which exploded 140.6% to $4.6 billion in 1999 and is forecast to increase at a 39.5% compound annual growth rate, more than quadrupling to $24.4 billion by 2004."

Growth in online adspend should account for nearly a quarter of total advertising growth forecast for all segments through 2004. The loss to the internet of some newspapers’ classified and real estate advertising has been largely offset by strong national advertising, increased dot-com ad spending and development of online classified advertising programs.

Citing another positive factor for traditional media, the report emphasises the ageing of the US population, with 71% of those over the age of 35 reading a daily newspaper each weekday. Also, "contrary to popular thought, television viewing is not being cannibalized by growing Internet use."

News source: New York Times