Online ad revenue to quadruple by 2005, says report.
Online advertising revenue is expected to more than quadruple to US$16.5 billion by 2005 from US$3.5 bilion in 1999, Jupiter Communications said in a report released Wednesday.
Despite the widespread talk of softening in the online ad market, Jupiter said online ad spending will grow as businesses look for more efficient and accountable ways to approach marketing.
An executive survey conducted by Jupiter found that marketers planned to increase Internet ad spending at a higher rate than in any other medium, including magazines. About 73 percent of those surveyed said they would increase their online ad spending in the next 12 months.
However, with that growth will come clutter, making it more difficult for advertisers to get their message out, the Jupiter report said. The research firm expects consumers to be exposed to 950 ad impressions, or marketing messages, online per usage day by 2005 compared to 440 impressions in 1999.
To combat the growing clutter, advertisers will have to diversify their ad models and online methods, Jupiter said.
Among the tactics advertisers will have to use include cross media promotions, using both offline and online vehicles.
Jupiter also sees more flexible ad pricing, with about 30 percent of online advertising sold on performance-based pricing, which involves looking at metrics such as revenue per customer.
Many of the largest traditional offline spenders will make up a large part of the US$16.5 billion in revenue expected to be spent online by 2005.
