Online Ads: Short-Term Sloth, Long-Term Growth, Predicts Jupiter

09 August 2001

New York-headquartered online researcher Jupiter Media Metrix is seemingly in two minds as to the health of the online advertising patient.

At its online ad summit in Manhattan yesterday, Jupiter announced sharply reduced online adspend forecasts for 2001, now guessed at an aggregated $5.7 billion instead of its earlier estimate of $7.3bn. But even at this lower figure, adspend this year will still be up 5.6% on $5.4bn in 2000.

And although Jupiter still professes expectations of growth over the next five years, it has whittled its ad revenue forecast for 2005 from $16.5bn to $12.9bn. In 2006, the online ad industry will still fall short of Jupiter’s previous guess by around $1.5bn.

According to the firm’s senior analyst Marissa Gluck: “Marketers' inability to evaluate online advertising effectively has lead to the current hiccup in spending. “

But despite the recession, Gluck hyped the long-term benefits of the medium to advertisers. “Online advertising, when fully measured, remains a strong impetus of consumer action - including increasing traffic and sales, inspiring loyalty and promoting referrals," she opined.

By 2006, online advertising will account for 7% of the total advertising cake – currently around 3% – with the financial services sector leading the herd with an outlay of $2.1 billion. In second and third places, automotive and media companies will respectively contribute $2 billion and $1.6 billion.

Much of the anticipated growth will come from digital marketing (coupons, promotions and email rather than website ads) predicted to reach $2 billion in spend this year. These acctivities, said the prescient Gluck, will overtake online advertising by 2006, reaching $19.3bn.

News source: CampaignLive (UK)