US Online Adspend Will Exceed That of Magazines by 2008

28 July 2004

America's online advertising expenditure looks set to equal that of magazine advertising by 2007, then rapidly overtake it over the next few years, according to a new study by Jupiter Research.

The report believes this year's advertising budget will assign $8.4 billion (€6.9bn; £4.5bn) to online services and $12.2bn to magazines. This is predicted to level out to $13.8bn for both sectors in 2007, after which online ad spending will receive $15bn compared with magazine ad spending of $14.5bn in 2008.

The growth in online ad expenditure is attributed to several factors: paid-search advertising in which marketers link ads to search engine outputs, faster broadband connections, internet display ads and a downturn in the number of magazine ad pages.

This latter influence is borne out by findings from the Publishers Information Bureau which show that general interest and Sunday magazine ad pages have declined since 2001, falling by 3.05% in 2002.

Merchant bank Veronis Suhler Stevenson continues the gloomy forecast for magazine advertising with a study revealing that perusal of print media by consumers is also lapsing and will do so at least until 2007.

But others disagree. Michael Clinton, executive vp of Hearst's Hearst Magazines believes consumers want the best of both worlds. Extolling the virtues of online services for rapid information and print media for an indulgent read, he claims that "one does not preclude the other."

Data sourced from: The Wall Street Journal Online; additional content by WARC staff