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28 Feb 2012

Online Advertising Spending Projections

February 28, 2012PPC Advertising
It should be no surprise that ad spend is projected to grow again in 2012, however, it is expected to slow down considerably in the following years. Online ad spend is still on the rise, but its age is starting to show.
 
According to online advertising research company eMarketer, search spending is expected to rise 27% in 2012, to just over $19.5 billion dollars. They also predict that this spending will rise by an additional $10 billion or so by 2016. This exhibits growth, but at a slower pace than we have seen previously. This can be attributed to the fact that this type of advertising has been around for some time now, and most of the major players are already participating in this format.
 
Of course there is always room to expand, but as technology evolves, advertisers may be investing even more heavily in interactive advertising, such as apps and micro-sites. By the time 2016 rolls around, it is predicted that online ad spend will have only experienced a six percent increase from the previous year. This of course is a large fall from the aforementioned increase that is predicted for 2012.
 
That being said, the search giants shouldn’t be too concerned about a major drop off just yet. EMarketer also predicts that Google will profit most quickly among their competitors this year. However, they believe that Microsoft’s projected growth will outweigh Google’s during 2013-2014. That being said, Google will have already staked their claim on being the biggest provider by showing revenues equaling more than $20 billion while Microsoft’s will still be closer to $2 billion.
 
Even though Google is predicted to have gained almost 80% of the share of online ad spend available in that universe, Microsoft will grow steadily by picking up the revenue that AOL and Yahoo are projected to lose by 2014, making them the clear runner-up. Trends are expected to continue in the same direction with Microsoft better solidifying their spot as second best.
 
The predictions outlined in this blog are based on statistics provided by eMarketer via data from the Interactive Advertising Bureau and Pricewatercoopers. The last full measured year was 2010, so please remember that these are projections based on existing trends in online ad spending.