2011 Online Ad Growth to Outpace Total Ad Spend Growth
While there will be only a moderate increase in overall ad spending in 2011, Borell Associates, a research and consulting firm that tracks local advertising, forecasts continued strong growth for online advertising, including mobile, in its 2011 Ad Forecast Memo.
Overall, advertisers will increase their spending next year by less than 5 percent above this year's projected level, bringing U.S. ad spending totals to $238.6 billion, the memo said. Total online ad spending, however, is projected to grow almost 14 percent, from $45.6 billion in 2010 to $51.9 billion in 2011. The fastest-growing segments of online advertising are the local sector, anything targeted and everything involving social media, the memo said.
By next year, local online advertising should grow by almost 18 percent, from $13.7 billion in 2010 to $16.1 billion in 2011, the memo pointed out.
The big driver of this growth will be targeted display — i.e., banner ads — advertising, which Borell expects to grow almost 60 percent next year, reaching $10.9 billion for national and local combined. While national advertisers will increase their use of targeted display by nearly 50 percent, use of targeted display by advertisers local to the markets where their ads run will more than double, reaching more than $2.3 billion next year.
Run-of-site display advertising, however, continues to lose its luster. Sales of run-of-site display ads will continue to decrease, dropping 14 percent from this year's level — from $9.5 billion to $8.2 billion for both local and national. Most of the spending decease will come from national advertisers; local run-of-site ads are forecast to decrease less than 3 percent next year.
The national paid search ad format will experience a double-digit spending decline next year, moving down 11.3 percent. Local spending decreases in paid search are sure to follow, perhaps as soon as 2012, Borell forecasts.
Other findings from the memo include the following:
- email advertising will see moderately strong growth in 2011, up 9 percent to $16 billion for national and local;
- online promotions will top $24 billion next year, up 10 percent from this year's total;
- the use of online couponing is forecast to grow almost 14 percent in 2011, translating to savings of $9.1 billion; and
- mobile ad sales will enjoy growth of more than 20 cents of every online ad dollar spent next year.