‘Search Ads’ Will Hike US Online Ad Revenues to $6.3bn in 2003

01 August 2003

Explosive growth in paid search advertising, increasing in 2003 by almost 50% to $1.6 billion (€1.42bn; £1.0bn), will power a modest recovery in US online advertising, according to the latest findings from Jupiter Research.

Jupiter released on Thursday the industry’s first independent paid search projections as part of its online advertising forecast. The report shows online display ad sales continuing to shrink 6% to just over $3 billion. Overall, however, online advertising will grow 10% this year, to $6.3 billion.

Says Jupiter analyst Gary Stein: “At the risk of stating the obvious, search is hot. Just as important, paid search’s impact reaches way beyond its dollar volume. The players, the tactics and the technologies of search are the focal point of critical digital marketing trends like dynamic pricing and contextual advertising,” he added [although offering no English translation of his last sentence].

Research director/vp David Card was not only more coherent but also offered encouragement to classical web advertising, banners et al.

“Online display ad sales will turn around beginning in 2004,” he predicted. “Better inventory control by publishers and a broadband kicker will push online display advertising sales up over 15% next year, and over 20% in 2005 and 2006.”

Jupiter projects that online advertising overall (paid search, display ads and classifieds) will grow to $14.8 billion in 2008, when the medium will account for 6% of all US ad expenditure.

Data sourced from: Jupitermedia Corporation; additional content by WARC staff