Outsell: Online Ad Spending to Grow Almost 18 Percent in 2007
Online advertising is expected to grow 17.9 percent in 2007, with search engine keyword purchases expected to grow the fastest at 39 percent, according to Outsell’s 2007 ad spending report. The report, specifically tailored to the needs of the publishing industry, says publishers need to better compete for the dollars advertisers spend on their own Web sites by offering them “unique value” that the advertiser cannot replicate on its own.
Outsell conducted its annual report in August, fielding a Web-based survey to 1,010 advertisers, who are responsible for an aggregated $6.5 billion in ad spending or for specifying ad budgets.
In addition to keyword spending, advertisers are also expected to boost their spending on sponsored content by 38 percent, on trade or b-to-b Web sites by 30 percent, and on Webinars by 28 percent, Outsell says. Advertisers are also moving their money into vertical search, which is projected to grow by 18 percent, and their own Web sites, where growth will be 17 percent.
Outsell warns publishers that advertisers plan to dedicate about 58 percent of their online budgets to their own Web sites this year, that compares to the 8 percent of they plan to spend on trade Web sites offered by publishers
Despite the buzz surrounding blogs and social media, spending on blog advertising is forecast to fall 2 percent this year. Mobile advertising is expected to fall 4 percent. “These are blips in growth rates that will undoubtedly turn positive again in 2008,” Outsell said in its report. “But they do reflect advertisers who are moderating their early enthusiasm with a dose of realism about reasonable growth rates.”
Webinars, vertical search, and sponsoring content, all with low single digit shares, are still growing rapidly, reflecting continued strong advertiser enthusiasm.
The report went on to say that e-mail marketing, including e-newsletters, is a “powerful” multiple and its 12 percent share of online ad spending exceeds search spending, which has a 9 percent share. E-mail marketing was also rated more effective for branding and lead generation than search engine marketing. “This makes it a must-consider tool in publishers’ audience-development portfolio of offerings,” the report said.
The pay-per-click share of online ad spending is expected to fall 1 percent this year, while cost per action share is expected to grow 8 percent, and sponsorships share is expected to grow 12 percent.
To learn more about Outsell’s take on print and event ad spending in 2007, look for this Thursday’s Folio: Alert.