Skip to main content

U.S. Marketers Moving More Ad Budget to Net

Internet advertising in the United States continues to be both a major business in the Digital Marketplace, as well as providing the funding for most of the Internet services that consumers use.

As U.S. marketers continue moving their available budgets from the traditional media onto the net, IDC forecasts that Internet advertising will grow about three times as fast as advertising overall during the forecast period.

The overall revenue of Internet advertising will grow from $16.9 billion in 2006 to $31.3 billion in 2011 at a compound annual growth rate (CAGR) of 13.5 percent. Search advertising will retain its number one position as the advertising format garnering the most ad spend.

However, even though absolute spending on search advertising will continue to increase, its market share will slowly decline from 40 percent in 2006 to 32 percent in 2011 as video advertising grows.

IDC believes that this decline poses a strategic challenge to Google, the market leader in search advertising, since more than 99 percent of its income stems from search-related advertising revenue.

As broadband penetration has increased and consumers' Internet connections allow for the download of data intensive graphics and video, advertisers' spend on rich media ads -- which include broadband video commercials -- has been steadily increasing. IDC believes that with the expected breakthrough for video consumption and video ads, this market share will grow fast.

The future of Internet advertising -- and of Google, Yahoo!, plus the other players -- depends on how fast video ads will grow and how well the media companies will be able to capitalize on it.

"Broadband video commercials will experience their breakthrough in the coming years. This will create tremendous opportunities, but also threats, for old and new media companies. At the same time, search advertising will lose market share, which may pose a strategic challenge for Google, the Internet advertising market leader," said Karsten Weide, program director, Digital Marketplace: New Media and Entertainment at IDC.

In contrast, I don't see the apparent shift in the marketplace to be a challenge for Google at all, since it's well positioned to make the transition to a greater emphasis on video. However, I do believe that the main threat will continue to be for those traditional advertising and PR firms that are unable to adapt to the broader changes taking place.

It's inevitable that informed marketers will be turned-off by advertising and PR executives that are trapped in the mass-market era, and are incapable of making the journey to a more targeted online media model. Unfortunately, many that were schooled in the "broadcast mindset" have the same essential contempt for the buying public as e-mail spammers.

The rapidly decreasing demand for specialists in one-size-fits-all, indiscriminate and otherwise irrelevant advertising messages means that as the budgets move, so will the talent needs.

Popular posts from this blog

Digital Talent Demand Exceeds Supply in Asia-Pac

Even the savviest CEO's desire for a digital transformation advantage has to face the global market reality -- there simply isn't enough skilled and experienced talent available to meet demand. According to the latest market study by IDC, around 60-80 percent of Asia-Pacific (AP) organizations find it "difficult" or "extremely difficult" to fill many IT roles -- including cybersecurity, software development, and data insight professionals. Major consequences of the skills shortage are increased workload on remaining digital business and IT employees, increased security risks, and loss of "hard-to-replace" critical transformation knowledge. Digital Business Talent Market Development Although big tech companies' layoffs are making headlines, they are not representative of the overall global marketplace. Ongoing difficulty to fill key practitioner vacancies is still among the top issues faced by leaders across industries. "Skills are difficul

Mobile Device Market Still Awaiting Recovery

The mobile devices market has experienced three years of unpredictable demand. The global pandemic, geopolitical pressures, supply chain issues, and macroeconomic headwinds have hindered the sector's consistent growth potential. This extremely challenging environment has dramatically affected both demand and supply chains. It has led to subsequent inflationary pressures, leading to a worsening global cost of living crisis suppressing growth and confidence in the sector. In tandem, mobile device industry stakeholders have become more cautious triggering market uncertainties. Mobile Device Market Development Operating under such a backdrop, the development of mobile device ecosystems and vendor landscapes have been impacted severely. Many of these market pressures persisted throughout 2022 and now into 2023, borne chiefly by the smartphone market. According to the latest worldwide market study by ABI Research, worldwide smartphone shipments in 2022 declined 9.6 percent Year-over-Year

Global Digital Business and IT Consulting Outlook

Across the globe, CEOs and their leadership teams continue to seek information and guidance about planned Digital Transformation initiatives and the most effective enterprise organization change management practices. Worldwide IT and Business Services revenue will grow from $1.13 trillion in 2022 to $1.2 trillion in 2023 -- that's a 5.7 percent year-over-year growth, according to the latest market study by International Data Corporation (IDC). The mid-term to long-term outlook for the market has also increased -- the five-year CAGR is forecast at 5.2 percent, compared to the previous 4.9 percent. Digital Sevices & Consulting Market Development IDC has raised the growth projection despite a weak economic outlook, because of vendor performances across 2022, growth indicators from adjacent markets, increased government funding, and inflation impacts. The actual 2022 market growth was 6.7 percent (in constant currency), which was 87 basis points higher than forecast last year, alth