Online Forecast to Hit 20 Percent of Total '07 Ad Spending

Online ad spend is forecast to reach 20 percent of the total U.S. ad spend in 2007. That's according to an annual ad spending study for 2007 released by Outsell.

A survey of marketers found companies plan to increase their online spending 18 percent in 2007. The Internet channel is expected to reach 20 percent of total ad spend. Online will continue to chip away at print, which is expected to maintain 40 percent of ad spend. The share held by TV, radio, and movie ad spending is expected to slip 3.5 percent this year.

Pay-per-click (PPC) ads will take a one percent hit this year due to concerns over click fraud. Almost half of the advertisers surveyed (49 percent) have reduced or plan to reduce their PPC spending. Conversely, cost-per-action (CPA) ad spending is expected to increase by 8 percent.

Online sponsorships are expected to increase by 12 percent.

Total ad spending is forecast to increase 5.8 percent. That's an optimistic outlook compared to 2.6 percent growth estimated by TNS Media Intelligence. The TNS data excludes search and sponsored listings.

The forecast is calculated from a Web-based survey of 1,01- advertisers. It looked across five media types: online, print, events, TV/radio/movies, and other. Respondents represent $6.5 billion in ad spending.