Online Ad Share Jumps to 20%; Search Engine Ad Spending to Grow at 39% 

U.S. companies plan to increase their online ad spending by 18% this year, faster than for any other major media type, taking online’s share of overall ad market to 20%, according to Outsell's annual ad spending report. 

Overall U.S. advertising is forecast to grow 5.8% in 2007. Advertisers also plan to raise their spending for advertising on search engines by 39%, the fastest of any online media method.

Outsell report is based on a Web-based survey of 1,010 advertisers, who control about $6.5 billion of spending, and looked at five media types—online, print, events, TV/radio/movies, and other. 

Other Highlights from Outsell's Report:

  • Print, the largest recipient of ad dollars at 40% share, will continue to lose share while online’s ad share grows to 20%. 
  • The share of TV/radio/movie ad spending will decline about 3.5% this year.
  • Advertisers’ share of online spending for pay-per-click (PPC) ads will fall 1% in 2007, while cost-per-action ads’ share will grow 8% and online sponsorships’ share will rise 12%.
  • 49% of advertisers have reduced or plan to reduce their PPC spending because of click fraud, up from 37% in the Spring of 2006. 
  • Advertisers rate their own Web sites and e-mail marketing more effective than search engine ads, additional drivers in PPC’s slowdown.
  • Advertisers rate online advertising very effective for branding 
  • Advertisers are redirecting more trade magazine ad dollars to events than they are moving to paid search.

Related: Online Forecast to Hit 20 Percent of Total '07 Ad Spending - ClickZ

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