Online Ad Spend in the US forecast: 2011-2016

Countries covered: United States Overview This report provides clients with the following data: Ad spending online in the US, 2010-2016, per year Online ad spend as a percentage of all US ad spend, for each of these years Online ad spend by format (Search, Banner, Classifieds and directories, Video, Sponsorships, Rich media, Lead generation and Email), for each of these years This report draws from primary and secondary research. Forecasts have been developed using a variety of statistical methods and models and where possible have been compared with forecasts from other organizations. Variables include: Data from major ad sellers, including Google, Yahoo!, Microsoft, AOL and Facebook IAB data Economic data Demographic changes Other firms' data Contents and tables Online ad spend overview Current market data In the first half of 2011, online ad revenues rose 23.2%, to reach a record US$14.9bn (IAB.net) This rate of growth is double over the previous year - an 11.3% growth over 2009. Ad revenues quarter two grew 24.1%, to reach US$7.7bn. Display advertising added up to more than US$5.5bn during the first half of 2011, a year on year growth of 27.1%. Digital video grew 42.1% during the same period. Whilst display accounted for 37% of all spend in the first half of 2011, search formed 49%. Lead generation grew 25.4% year on year, in first half year 2011. According to IAB and PwC, ads that used performance-based models increased faster than ads using impression-based models, rising to $9.6bn during the same period. Although impression-based ad spend grew by 10.8%, this model accounted for only 31% of total ads, which was a decrease from 35% year on year. We see this as a trend. Forecast to 2016 We forecast that US online ad spend will increase by a compound annual growth rate (CAGR) of +12% between 2010 and 2016, reaching US$51.1bn In 2011, we forecast that ad spend will increase by 20% over 2010, to reach US$31.3bn. After 2011, rate of growth will decline to 14%, to US$35.6bn in 2012. 2016 growth over 2015 will be 7%. In 2010, 17% of all ad spend in the US went online. In 2011, we forecast this will increase to 20%. In 2016, we forecast that 28% of all ad spend will go online Overall factors for explaining this include growth in the use of developing ad formats, improved ad and content targeting, growth in online video behaviour, refined search, and the prevalence of online social networking services. However, growth in online ad spend will remain constrained due to challenges in measuring online ad effectiveness.

Additional Information

Online ad spend overview
Current market data

In the first half of 2011, online ad revenues rose 23.2%, to reach a record US$14.9bn (IAB.net)
This rate of growth is double over the previous year - an 11.3% growth over 2009.
Ad revenues quarter two grew 24.1%, to reach US$7.7bn.
Display advertising added up to more than US$5.5bn during the first half of 2011, a year on year growth of 27.1%. Digital video grew 42.1% during the same period.
Whilst display accounted for 37% of all spend in the first half of 2011, search formed 49%.
Lead generation grew 25.4% year on year, in first half year 2011.
According to IAB and PwC, ads that used performance-based models increased faster than ads using impression-based models, rising to $9.6bn during the same period. Although impression-based ad spend grew by 10.8%, this model accounted for only 31% of total ads, which was a decrease from 35% year on year. We see this as a trend.

Forecast to 2016

We forecast that US online ad spend will increase by a compound annual growth rate (CAGR) of +12% between 2010 and 2016, reaching US$51.1bn
In 2011, we forecast that ad spend will increase by 20% over 2010, to reach US$31.3bn.
After 2011, rate of growth will decline to 14%, to US$35.6bn in 2012.
2016 growth over 2015 will be 7%.
In 2010, 17% of all ad spend in the US went online. In 2011, we forecast this will increase to 20%. In 2016, we forecast that 28% of all ad spend will go online (see Figure 2).
Overall factors for explaining this include growth in the use of developing ad formats, improved ad and content targeting, growth in online video behaviour, refined search, and the prevalence of online social networking services.
However, growth in online ad spend will remain constrained due to challenges in measuring online ad effectiveness.

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