GroupM: Global Web Ad Growth Will Slow to 30 Percent in 2008

Growth of Internet ad spending will continue to slow in 2008 and the coming years, though plenty of new dollars will make their way to the Web. “This Year, Next Year,” a report released by GroupM, forecasts 28 percent of new ad dollars will be spent on the Internet this year globally.

Much of the new money will likely go to search. “I think the whole search area is primarily fueled by new money,” said Adam Smith, futures director at GroupM. “Search is the largest-growing component of Western marketing, and I think it represents the largest portion of genuinely new dollars.”

Television is expected to continue its growth, taking in up to half of new dollars, which will come from a combination of emerging markets, Olympics coverage, and U.S. elections. While many think the ongoing Writers Guild of America strike will send dollars to the Internet, media buyers may go another direction, Smith said.

“In the event of a prolonged strike, and I guess you can call this a prolonged strike, the view of the TV buyers will [have] two effects: acceleration of the migration out of broadcast and into cable, and creativity of the networks,” he said. “Necessity is the mother of invention, and we think there will be a catalyst for subsidizing new content.”

As it has in the U.S., the global growth rate of global Internet ad spending is expected to taper. Web ad spending grew 35 percent in 2006 and 32 percent in 2007, according to GroupM, which expects the growth figure for this year will be 30 percent. It added North American Internet ad spending will grow by 42 percent in 2008, and by year-end will comprise 10.1 percent of all media ($48.4 billion) worldwide. GroupM believes the U.S. Web spend could reach 11.9 percent of all advertising, or up to $20 billion in spending.

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