Technology | Media | Telecommunications

Saturday, December 25, 2010

U.S. Online Ad Spending Will Surpass $40 Billion


We now know that 2010 will go down in history as the first time that marketers invested more in online advertising than newspaper advertising, according to the latest eMarketer forecast.

Total newspaper spending, including advertising in print and online editions, will fall to $25.7 billion in 2010, a decline of 6.6 percent. Spending on print newspapers alone will fall more steeply to $22.8 billion.

Meanwhile, a rise of 13.9 percent will push U.S. online ad spending up to $25.8 billion by year's end.

The spending gap will widen significantly next year, as total newspaper advertising spending falls again to $24.6 billion (including $21.4 billion for print) and online climbs to $28.5 billion.

"It's something we've seen coming for a long time, but this is a tipping point," Geoff Ramsey, CEO of eMarketer, told The Wall Street Journal.

Despite a drop in the dollar amount of online newspaper spending in a down economy, online has been accounting for a growing portion of all newspaper ads as print spending declines even more sharply.

In 2010, online makes up about 11.7 percent of all U.S. newspaper ad spending, a proportion set to rise to 13 percent next year.

Ad spending on newspapers is expected to continue its decline. eMarketer estimates that print newspaper spending has already been cut in half since 2006 -- and online has done relatively little to make up the difference.

In contrast, total U.S. online advertising spending will continue double-digit growth through 2014, when it will surpass $40 billion.