In a Clickz post I read yesterday, they write about Piper Jaffray's predictions for online ad spending. Some of the takeaways:
- Online ad spending expected to exceed $80B by 2011, including search advertising, display ads, text links, video advertising and email.
- People are the driving force. As more consumers spend more time online, create content and control their own media consumption, advertisers will continue to boost online budgets.
- Increasing fragmentation of media choices is among the key challenges advertisers will face. More touch points will exist and advertisers will have to spread their budget across multiple media platforms. What they really mean is unclear, but this article states that "advertisers can no longer expect to reach audiences in contextually-relevant places". I think what they're saying is that the supply of contextual inventory will not keep pace with demand, forcing advertisers to spend elsewhere.
- They believe Google can achieve 70-80% market share both in the US and worldwide. This seems to conflict with that last point.
- Video ad formats will experience a growth spurt as brand advertisers move money from TV to the Web.
- Small advertisers (otherwise unable to afford mass market vehicles) will continue to drive online ad spending. AMEN.
I agree that video advertising will grow substantially, because it's easy for traditional media TV media buyers to understand. I believe display advertising (CPM) will see lackluster growth, if any -- the ROI just isn't there. I believe that we're at the forefront of the "personal web" which leverages the true power of 1-to-1 targeted marketing . This will bring about a new wave of contextually/behaviorally targeted ad growth (CPC), which further grows the "long tail" of advertisers while also serving as a revenue model for the long tail of publishers.