Global Internet Ad Spend to Climb 28 Percent in ’07

Global Internet ad spending will grow by 28.2 percent in 2007, according to a forecast report courtesy of ZenithOptimedia. That’s down slightly from the 31 percent growth it’s expected to achieve this year, but far more aggressive than growth in other media.

The report finds the Internet’s share of ad spending will increase from its estimated 5.8 percent for the current year to 7 percent in 2007, and will eventually climb to 8.6 percent in 2009.

By comparison, global ad spending in all channels will collectively grow by only 3.9 percent.

Online ad spending is expected to hit $24.5 billion by year-end and $31.3 billion next year. It will hit $42.7 billion in 2009, according to ZenithOptimedia.

While channels like cinema and outdoor have already been outpaced by the Web, and the Internet is expected to overtake radio within three years, ZenithOptimedia’s head of publications, Jonathan Barnard, said the channels aren’t competing directly. “The traditional medium that suffered the most was print,” he said, noting many newspaper dollars “have gone directly to online classified and auction sites.” In 2007, newspapers are expected to account for 28.5 percent of the ad spend globally.

By country, the U.K. accounts for the largest share of online spending by advertisers, at 13.5 percent, a figure that’s forecast to reach 21.5 percent by 2009. Barnard said there are a few theories for the British dominance of online ad spending. TV in the U.K. has limited advertising opportunities, for one. The BBC, which encompasses a number of channels, is government-funded and therefore commercial-free. “Advertisers can’t reach audiences,” he said.

Another trend: “There’s so much English-language content on the Internet,” said Barnard. According to him, the U.K. may simply be piggybacking on the U.S. market.

There are only three countries — Norway, Sweden and the U.K. — where online’s share of ad spending is 10 percent or greater. By 2009, ZenithOptimedia predicts Australia, Canada, Israel, Japan, South Korea, Taiwan and the U.S. will join that club.

A separate report released by GroupM said developed countries account for 90 percent of all new Internet dollars. According to that research, paid search is the largest type of Internet advertising, accounting for $7.8 billion this year, and is expected to reach $10.6 billion next year and $19.7 billion by 2009. Display, which includes rich media and video, will likely hit $7 billion by year-end, and grow to $8.6 billion in 2006 and $13.3 billion by 2009.

Classifieds are expected to bring in a global $3.3 billion this year and $4.6 billion next year. By 2009 the classified expenditure is forecast to reach $8.9 billion.

Related reading