Think ?Anything Targeted, Everything in Social Media,? for Onlilne Ad Growth, New Borrell Forecast Says

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By: E&P Staff

Looking at online ad spending in 2011, Borrell Associates sees targeted display advertising, video streaming and social media as hot, hot, hot. Run-of-site display and national paid search, on the other hand, are not, not, not.

Total online ad spending should grow 14% from 2010 to $51.9 billion next year, Borrell says. “The fastest-growing segments of online advertising are the local sector, anything targeted, and everything involving social media,” the firm said in a summary of its 2011 Ad Forecast released Tuesday.

Inside that online growth, local advertising should grow by almost 18%, from $13.7 billion, in 2010, to $16.1 billion, in 2011, Borrell says.

“The big driver will be targeted display (such as banner ads) advertising, which we expect to grow almost 60% in 2011, reaching $10.9 billion for national and local combined,” the memo says.

National advertisers will increase the use of targeted display more nearly 50%, Borrell predicts, while the use of targeted display by local advertisers “will more than double” next year.

Streaming video should also jump in 2011, increasing more than 60% to $5.6 billion as less expensive and do-it-yourself tools “put this ad format within the budgets of even small advertisers,” the memo says. Two of every five streaming video ad dollars will be from local advertisers, the firm predicts.

Among the losers next year will be run-of-site display, which Borrell believes will decline 14% from this year to $8.2 billion for both local and national.

“This early online format has simply been overshadowed by newer, more productive ad formats, and competition has pushed display unit prices down,” the forecast says.

National paid search ads will also fall by double digits in 2011, dropping by 11.3% as a result of lower pricing and churn. But Burrell predicts local advertisers will kick up their paid search ad format buy by more than 10%.

This online growth and decline will take place in an overall environment of moderately increasing growth, according to Borrell.

“Overall, advertisers will increase their spending next year by less than 5% above this year’s projected level, bringing U.S. ad spending totals to $238.6 billion,” the firm said.

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