US Internet adspend may reach $50 billion by 2016

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The Internet Advertising Bureau US  (iab) have just  published their 2011 Internet Advertising Revenue Report which is a joint iab/PwC study.

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We have extracted iab’s adspend figures from 2000 to give the overall scale of the growth. We reckon it shows a compound annual growth rate (CAGR) of around 13.3%. Looking again at  Boston Consulting Groups (BCG) forecast  of US online advertising spend growth In their $4.2 trillion Opportunity Report they are forecasting a CAGR of 10.5% from 2010 to 2016. This they forecast would take the adspend to over $47 billion by 2016. iab calculate an actual growth from 2010 of 22% and a CAGR from 2002 of 20.3%. So it seems likely to us that  adspend could exceed $50 billion in the 2015/16 timeframe.

The iab categorise Mobile* adspend  separately and calculate that it increased by 149% to $1.6 billion in 2011.

“The year 2011 saw mobile advertising become a meaningful category. By combining some of the best features of the internet, along with portability and location-based technology, mobile advertising is enabling marketers to deliver timely, targeted, relevant, and local advertisements in a manner that was not previously possible. It is for these reasons that we expect strong growth to continue with mobile advertising.” - David Silverman, Partner, PwC

The constituent split of the adspend shows the following:

Search 46.6%
Display 34.8%
Classified 8.1%
Mobile 5.0%
Other 5.5%

iab note that the adspend surpassed Cable TV advertising spend in the year and is now only some $7 bn behind Broadcast TV spend.

Some further perspective can be derived from groupm’s  (a WPP subsidiary) This Year Next Year: Interaction 12 report which aims to “….. offer perspective on the state of the increasingly digital media landscape; and how change is impacting upon media and consumer behaviour;….”

US internet adspend as a percentage of total adspend is forecast as being 21.9% for 2011 (incidentally the UK figuree is 35.8%  which we commented on previously). The US Internet adspend as a percentage of world internet adspend for 2011 is forecast at 38% (UK comparativer is 8.1%).

iab’s full report, including further info, is available from their press release

* “Mobile Advertising. Advertising tailored to and delivered through wireless mobile devices such as smartphones (e.g. Blackberry, iPhone, Android), feature phones (e.g. lower-end mobile phones capable of accessing mobile content), and media tablets (e.g. iPad, Samsung Galaxy Tab). Typically taking the form of static or rich media display ads, text messaging ads, search ads, or audio/video spots, such advertising generally appears within mobile websites (e.g. websites optimized for viewing on mobile devices), mobile applications (e.g. applications for smartphones running iOS, Android, or other operating systems, or Java or BREW applications), text messaging services (i.e. SMS, MMS) or within mobile search results (i.e., 411 listings, directories, mobile-optimized search engines).”

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