Digital Ads Expected to Hit $23B by 2010

  |  February 21, 2006   |  Comments

As audience shifts from mass media to niche content, Parks Associates sees digital media grabbing 10 percent of ad spending.

A new report from analyst firm Parks Associates forecasts across-the-board growth in digital media segments. New categories like in-game advertising and mobile will show the highest gains, according to the study, likely because they're starting from a lower base.

"Advertising in the Digital Age: Challenges and Opportunities," gives a five-year breakdown of digital advertising spending across Internet display, search, rich media, DVR, in-game and mobile advertising. Overall, the firm expects digital media to grab 10 percent of overall ad spending, or $23.5 billion, by 2010. Last year, the company said, digital media captured just 5 percent of ad spending, or $9.45 billion.

The Internet display ad category is expected to grow at a four percent compounded annual growth rate to $2.4 billion by 2010. By contrast, JupiterResearch's much rosier prediction for display ads forecasts $7.2 billion by 2010. During the same period, Parks Associates sees search experiencing a 14 percent compounded annual growth rate to reach $9.7 billion. JupiterResearch's forecast places search at $7.5 billion in revenues in 2010.

The report discusses how media is moving from mass to niche, leaving advertisers to adapt to new content and ad formats. "We believe that advertising over the next five years will go through some changes," said Parks Associates Research Analyst Harry Wang in a Webcast presentation of the report. "For content providers as well as media publishers, they have to provide content in a form that the audience prefers."

Emerging categories like rich media, in-game, and mobile advertising will show the most growth, according to the report. Internet rich-media ads are expected to experience a 31 percent compounded annual growth rate by 2010. The format will bring in an estimated $5.7 billion. In-game advertising will grow by at least 50 percent annually to $432 million. Advertising on a mobile platform is due to reach $2 billion.

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