Online Advertising Market Growth Still?

I saw the eMarketer online ad spending forecast just a couple days ago, along with John's note that online advertising was "taking a hit" (since when does continued growth mean taking a hit?). Looking at the forecast, obviously revised in light of the current economy, I wondered how these numbers differed from their online ad market forecast from December 2007 -- one year ago.

Here is eMarketer's online ad spending predictions from 2007-2011 side by side:

Clearly a bit different outlook, don't you think? I do think while this is currently more realistic, the actual numbers will beat these.  Here are their key takeaways combined with mine:

• [eMarketer] Continued growth. [Me] Yup, I agree. Online ad spend per household still hasn't even exceeded newspaper, direct mail and telemarketing ad spend per household, has it?
• [eMarketer] Display is suffering, but slight growth will come as the impression volume increase  outbalances the  decrease in CPM rates. [Me] Maybe. I would guess that display will be flat, unless ad networks and major publishers finally adopt more precise targeting (for improved advertiser ROI). Comparing search with display ads, rates are already so cheap and volume more plentiful -- lots of room for innovation here to the benefit of all advertisers.
• [eMarketer] Search will grow from 40% of the market to 50%, because it's much more trackable. [Me] Yes, it's much more trackable, but I'm not sure search volume is growing dramatically and I think that's the key to growing the market. Page view growth is in other areas of the Web, where display ads are currently. What if you could make that inventory much more trackable, with even better targeting than search? 
• [Me] 2009 will be the year when behavioral targeting will no longer be NEW, it will be offered by every ad network and will be a component in a majority of campaigns, and it will drive a rebirth in display advertising.

To that last point, in the last month I've spoken or met with 25% of the 50 top US ad networks, and 92% of them have already executed on a behavioral data strategy (more than retargeting) or will roll it out in the 1st half of 2009.

Let me just close with a forecast of US online advertising spending by format:

Comments

[MD.Siddiq]

very good