Online Advertising Growth Tops Expectations - InformationWeek

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Online Advertising Growth Tops Expectations

Paid search is expected to be the primary driver of growth over the next five years, JupiterResearch said.

Spending on online advertising in the United States is expected to reach $25.9 billion by 2011, almost 9 percent of the total ad-spend, a market research firm said Monday.

Paid search is expected to be the primary driver of growth over the next five years, JupiterResearch said. Search advertising overtook display advertising on the Web in 2005.

"The large increase in search advertising is due to new clients experimenting with search and advertisers competing for keyword placement, which drives up prices," JupiterResearch analyst Emily Riley said in a statement. "Additionally, as search advertisers mature, they start using longer lists of keywords, increasing their overall budget."

Online ad spending is outperforming expectations, jumping 40 percent last year, the analyst firm said. This year, spending is expected to rise by 21 percent.

According to the Interactive Advertising Bureau, an industry trade group, Web advertising last year reached $12.5 billion.

In addition to paid search, large spending increases are forecast over the next five years for online classifieds and rich media, such as video advertising, JupiterResearch said. The growth in the use of rich media ads is expected to come at the expense of static display advertising.

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