Digital Ad Spending To Rise 17%

Google, Yahoo!, Microsoft, Facebook And AOL Leading The Way

Digital Ad Spending To Rise 17%A new survey forecasts that digital advertising spending will increase by 16.6% in 2012, with double-digit increases expected through 2014. Online research firm eMarketer reports that marketers will spend $37.3 billion on digital ads in 2012, which is an increase from $32 billion last year. eMarketer forecasts the digital advertising market to surpass $55 billion in 2016.

The report also clearly shows that the online ad market is concentrated among just a few players. Combined, Google, Yahoo!, Microsoft, Facebook and AOL will take in $23.9 billion in ad revenues, representing nearly two-thirds of total digital ad spending this year. At $15.4 billion, Google's ad revenue alone will account for 41% of total digital ad revenues in 2012. Google, though, will see slightly slower growth than eMarketer estimated earlier this year, as the company's ad revenues for the first two quarters of 2012 were a bit lower than expected. Despite this factor, Google's growth will reach 20% in 2012 and remain in the double digits through 2016. By 2014, marketers will spend more than $20 billion on Google advertising, while digital ad revenue at Yahoo!, Microsoft and Facebook will each total just over $3 billion.

Search continues to be the leading digital ad spending format, although eMarketer predicts that its share will begin to drop this year as the shares of rich media, sponsorships and video increase. Display ad spending, which includes banner ads, video, rich media and sponsorships, will rise from 40% of total digital ad spending in 2012 to 46% of the total in 2016. Combined, spending on paid search and display advertising will account for more than 87% of all U.S. digital ad spending this year.