New Report Forecasts $23.5B for Digital Ads by 2010
Analyst firm Parks Associates released a new report indicating that there will be growth in digital media segments with new categories such as in-game and mobile advertising to offer the highest gains.
The report is entitled “Advertising in the Digital Age: Challenges and Opportunities,” and gives a five-year analysis of digital advertising spending. It talks about how media is shifting from mass to niche, which is forcing advertisers to adjust their strategies to include new content and ad designs. Parks Associates Research Analyst Harry Wang says that “We believe that advertising over the next five years will go through some changes. For content providers as well as media publishers, they have to provide content in a form that the audience prefers.”
Parks Associates discusses digital ad spending in Internet display, search, DVR, rich media, in-game, and mobile advertising. On the whole the research firm expects digital media to obtain about 10% of overall advertising spending, which translates into about $23.5 billion, by 2010. According to the company, last year digital media attained just 5% of total ad spending, or about $9.45 billion.
Internet display ads are expected to grow at a 4% compounded annual growth rate to $2.4 billion by 2010. This forecast by Parks is bleak compared to JupiterResearch’s optimistic outlook of Internet display ads growing to $7.2 billion by 2010. However, on the subject of forecasts for search, Parks Associates is the more pessimistic of the two, forecasting a 14% compounded annual growth rate that would put search at $9.7 billion by 2010. JupiterResearch expects search at around $7.5 billion in revenues in the same time period.
According to the report by Parks Associates, nascent categories such as in-game, mobile, and rich media advertising show the most potential for growth. In-game advertising is anticipated to grow by at least 50% annually to $432 million by 2010. Mobile advertising is projected to rise to $2 billion by the same year. Internet rich media advertising is expected to attain a 31% compounded annual growth rate by 2010 and rake in about $5.7 billion.
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