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Report: Online Ad Spending to Rise 23% in 2008

A recent report by eMarketer has everyone scratching their heads. It seems that the Web is set to buck another trend — the rumored economic recession. The report projects that online ad spending is supposed to rise by 23 percent this year (which, keep in mind, is slightly lower than what eMarketer projected in October 2007).

In 2007, online advertising sales reached $21.1 billion. By the end of the 2008, ad sales should be close to $25.9 billion. According to the report, there are a few key factors that help to make online spending so resilient. They include,

• Better measurability with a better understanding of the audience
• More effective ad placements resulting in increased prices
• Easier purchases for advertisers
• Better targeting of audiences through video advertising

Because advertisers now have a better sense of how online advertising can effectively reach users, advertising online is now viewed as trustworthy and safe—not at all like the risky investments the non-Internets have proved to be.

The eMarketer report also offered up the following projections:

• Search will account for the largest portion of online ad spending this year, making up 40 percent of web-based ad expenditures.
• Rich media/video ad spending is set to keep growing as a percentage of online ad budgets, rising to 18.5 percent in 2012 from 10.2 percent in 2008.
• Display will likely remain flat in 2008, coming in 21.1 percent the same as last year.

eMarketer senior analyst David Hallerman suggests that “the greater ability to measure ads online will likely encourage marketers with reduced budgets. Those same marketers are finding that the audiences they need to target are spending more of their media time on the web.”

Imagine that. Users are spending more time online? You don’t say. While advertisers and investors may soon look to the Web for comfort in times of economic unrest, the rest of us can take heart in knowing that this whole Internet thing is finally catching on.

The proof is in the pocketbook.

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