SOURCE: eMarketer

September 14, 2005 18:00 ET

US Internet Advertising to Reach $22.3 Billion by 2009

eMarketer Report Tracks the Flow of Ad Dollars to the Internet; and What Traditional Media is Doing to Combat the Loss

NEW YORK, NY -- (MARKET WIRE) -- September 14, 2005 -- In 2005, US Internet advertising spending will surpass $10 billion for the first time, shooting past that mark to $12.9 billion, according to eMarketer projections. That number more than doubles 2002's $6.0 billion figure. Four years from now, companies will spend nearly $10 billion more on Internet ads, reaching $22.3 billion in 2009.

Four basic trends support the continued growth of Internet ad spending:

--  Larger ad budgets overall
--  Shifts in ad budgets from other media to the Internet
--  More companies including the Internet as part of their campaigns
--  Increased prices for both branding ads (display and rich media) and
    direct response vehicles (such as paid search)
    
eMarketer's new report, Ad Spending Trends: The Internet and Other Media, explores the changing landscape of media spending -- online and off -- and the dynamics of how the two are affecting one another.

"The spending growth is impressive, but shouldn't come as too great a surprise," says eMarketer senior analyst David Hallerman, author of the report. "These dazzling increases are possible in part because growth came from such a small base. And in the last few years the Internet has truly become a mainstream medium."

According to quarter-by-quarter historical data from the Interactive Advertising Bureau and PricewaterhouseCoopers (IAB/PwC), US Internet ad spending has increased in eight of the last nine quarters. And eMarketer projects continued gains through 2005, with fourth-quarter spending hitting a record $3.8 billion.

"To call this advertising market 'hot' implies it's a fashion that might turn slack at any moment," Hallerman adds. "These yearly and quarterly ad spending gains point to a sea change in media usage among marketers, reflecting how the Internet has become an essential element of daily life for more and more individuals."

Key questions addressed in the "Ad Spending Trends" report:

--  Where is the money coming from to support increased Internet
    advertising?
--  When will the Internet's share of total media spending surpass the 5%
    mark?
--  How long can Internet Advertising keep increasing by 20%-plus each
    year?
--  What trends will most influence total media ad spending?
--  Which companies are investing the most ad dollars in which media?
--  And many more...
    
For more information on purchasing a copy of eMarketer's Ad Spending Trends report, visit www.eMarketer.com.

About eMarketer

eMarketer is "the First Place to Look" for market research information related to e-business, online marketing and emerging technologies. eMarketer aggregates and analyzes e-business research from over 1,700 sources and brings it together in one place. This research is presented in analyst reports and the "eStat Database" -- the most comprehensive compilation of up-to-date e-business and online marketing statistics in the world. For more information, visit www.eMarketer.com.

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