Big Pop Seen for Online Ads

Marketers are poised to ramp up their spending on Web ads this year more quickly than previously expected, as advertisers allocate an increasing share of their budgets to the Internet, according to new projections from eMarketer.

Online ad spending is expected to increase 20% to $31.3 billion in 2011, eMarketer predicts. The research firm previously pegged growth for Internet ad spending this year at 10.5%, to $28.5 billion. The boost marks a return to increases in the online-ad market that haven't been seen since 2007, before marketers started curtailing their budgets in the most recent recession. The Internet continues to steadily take advertising share from other traditional media, like newspapers and magazines. While television still dominates ad spending, the Internet now ranks second and is expected to capture a 20% share of marketers' ad budgets this year, compared with 38% for television, eMarketer says. Spurring the uptick in Internet advertising is a rush of spending on display ads, the graphical ads that appear alongside the border of a Web page and can include text, pictures and video, says David Hallerman, an analyst with eMarketer. Marketers are expected to spend $12.3 billion on display ads in 2011, up 25% from last year. After search, display is the most popular format in online advertising and is expected to take up 39% of marketers' online-ad budgets this year. Online video advertising, meanwhile, ranks as the fastest-growing segment.