Google is on pace this year to capture a quarter of all online ad spending, according to eMarketer, further increasing its dominance in the sector as the sector itself is projected grow at blistering rates. As Google snatches market share from Yahoo, online advertising in general will gain more ground against traditional marketing vehicles by 2010.
Last year, advertisers spent an average $71.51 per user, a number expected to increase to $88.28 this year, according to eMarketer’s estimates, and to nearly $100 per user by 2010. That pushes the expected spend to $21 billion in 2008, and to over $25 billion in 2010. This is all good news for Google, if its trend of dominance continues.
That’s a growth rate of about 30 percent per year, a trend industry experts expect to level off early next decade. The expected leveling is projected to be a discouragement to traditional advertisers to increase their level on Web-presence.
“In any other medium, executives would be delighted to see ad spending grow at those rates,” said David Hallerman, eMarketer senior analyst.
“But when these rates are put into perspective – compared against the recent rates of growth – a number of commentators will start devaluing the online advertising market. But they will be wrong.”
Hallerman expects a few distinct shifts to occur over the next four years:
1. Online advertising will be allocated a larger percentage of budgets, drawing most notably from broadcast television and newspapers.
2. Companies will become more comfortable with various online ad platforms and put more effort into the targeting the Internet provides.
3. Paid search, video and plain display branding will carry higher prices.
4. Online branding increases in relevance and larger portions of budget will focus on utilizing video.
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