Paid Search Fuels Online Ad Recovery

By: Ann M. Mack

(Adweek IQ) Online advertising revenue is expected to rise 10% to $6.3 billion this year, according to the latest projections from Jupiter Research.

That growth will be fueled in part by the proliferation of paid-search advertising sales, which Jupiter predicts will skyrocket 50% to $1.6 billion in 2003.

The figures were released at Jupiter’s online advertising forum in New York Wednesday morning.

“At the risk of stating the obvious, search is hot,” said Gary Stein, an analyst at Jupiter Research, a division of New York-based Jupitermedia Corp. “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.”

The rising prominence of paid search has been evidenced by the continued success of Google, the market leader in paid search, and Yahoo’s recently announced plans to buy paid-search powerhouse Overture.

While paid search is a dominant force in 2003, Jupiter predicted that other online advertising sectors would pick up shortly. Online display ad sales are expected to rise 15%, according to Jupiter, due to better inventory control by Web publishers and increased broadband usage by consumers.

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