By: Matt Marshall | Venturebeat.com
Advertisers are likely to spend $31.3 billion buying online ads this year, 20 percent more than last year. That’s according to the encouraging forecast from market researcher eMarketer — and it’s almost twice the 10.5 percent growth in 2011 that eMarketer predicted in December.
This is great news, right? A solid rebound!
Well, sort of. The economy kicked into gear, advertisers got their budgets back, and they needed to spend it somewhere. And where did they put it? Online, of course. Not only are people spending more time online, the advertisers also saw excess online inventory being pumped out by the publishers, and they took advantage by buying it at bargain rates.
In other words, advertisers are buying more ads, but there’s so much inventory that it’s depressing rates.
The explosion of online advertising this is year is great. Depressing rates can be seen as a negative thing but also keep it mind that it allows smaller companies to have a stab at advertising online.
Lower Rates can also be a good thing