US online adspend to rise

19 January 2011

NEW YORK: Internet advertising expenditure should record a double-digit improvement in the US this year, while mobile is also due to experience rapid growth, Deutsche Bank has predicted.

The financial services giant surveyed 31 media buyers, responsible for approximately $5bn (€3.7bn; £3.1bn) in web adspend annually, and estimates spending will climb by 11% in 2011.

Deutsche Bank also pegged search and display expansion rates in the "double digits over the foreseeable future", defined as the period to 2015 at least.

"Online advertising would continue to grow, gaining share from traditional media," the company's report argued.

Newspapers and magazines, in particular, are the "most vulnerable" sector, as marketers reflect greater digital usage among consumers by shifting their own priorities.

Elsewhere, the organisation forecast mobile could become a "billion dollar segment" in 2011, more than twice the revenue delivered in 2010.

"Advertisers are increasingly dedicating separate budgets for mobile, indicating that mobile ad spend is slowly moving out of the 'experimentation' phase," its study argued.

A variety of further channels will also "ramp nicely" going forward, as platforms like Facebook and Groupon exert a rising influence on popular habits.

"Online media buyers are keeping tabs on new themes within online advertising such as radio, social, mobile and group buying," Deutsche Bank said.

"As these new business strategies flourish online, it does appear that online advertising growth would remain robust for the foreseeable future."

Looking at the broader industry climate, ad networks and publishers may soon come under pressure as a diverse range of players enter the digital arena.

"While currently a limited number of players ... have the critical mass with these emerging ad formats, we do anticipate these categories to evolve into much bigger opportunities, likely expediting the share gains from offline ad spending," Deutsche Bank said.

"Just as important, online data analytics remains an important area of focus for media buyers in their daily online toolset."

Having identified several key trends, the report suggested search and mobile titan Google, measurement firm comScore, ad serving specialist MediaMind and web conglomerate InterActiveCorp are all well-placed.

Data sourced from MediaPost; additional content by Warc staff