Agency Groups Predict Strong Online Ad Growth for 2011

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Online ad spend is set to enjoy another year of growth in 2011, according to forecasts issued today by WPP agency GroupM and Publicis-owned ZenithOptimedia.

According to Zenith's predictions, global spending on Internet ads will grow 14 percent year-over-year, totaling $70.5 billion in 2011 and representing 15.2 percent of overall ad spend. GroupM was more bullish, predicting digital spend will contribute 37 percent of global ad growth next year, resulting in $82 billion in revenue.

Meanwhile in the U.S., eMarketer - which aggregates forecasts from a variety of sources - projected a 10.5 percent increase in U.S. online ad spending next year, followed by double-digit growth every year through 2014 when spending will reach $40.5 billion.

According to Zenith, digital ad growth will be driven primarily by display and paid search investment, with the latter predicted to reach over $46 billion by 2013, up from $30.5 billion this year. Despite a dip in display ad spending since 2006, the rise of online video and social media have reinvigorated the medium, the company said, predicting it will account for over a third of online ad spend this year.

Both Zenith and GroupM suggested global online ad growth will come at the expense of traditional media channels, most notably print advertising, which GroupM says will be outpaced by digital by 2012. "Internet spending may indeed already have eclipsed newspapers if one allows that measured Internet ad investment does not include substantial advertiser investment in content creation, search-engine optimization and analysis," noted GroupM's Futures Director Adam Smith.

Zenith also pointed out much of the value being extracted from social media channels is not currently being measured. For example, "earned media" acquired through vehicles such as Facebook and Twitter accounts "will never be picked up in a survey of ad expenditure," the report stated.