Internet Ad Spending to Outpace Direct Mail, Says Report

Worldwide spending on Internet advertising will total $65.2 billion in 2008 and represent nearly 10% of all ad spending, according to a new report from IDC.

This spending is projected to grow 15% to 20% annually by 2011 reaching $106.6 billion worldwide--accounting for 13.6% of total expenditures--eclipsing those of direct mail, the report noted.

“By the end of the forecast period, spending for Internet advertising will trail direct mail – the third largest form of advertising – by more than $30 billion, while spending on TV and print ads will each be nearly twice as great as for online ads,” said John Gantz, chief research officer at IDC, in a statement. “The long-term opportunity for Internet advertising can be seen in the disparity between per capita spending. Total advertising revenues equate to more than $105 per inhabitant of the planet, while Internet advertising revenues are less than $50 per active Internet user.”

The report also found that:

* Keyword ads will remain the dominant type of Internet advertising throughout the forecast period, capturing more than a third of annual online ad spending worldwide.

* Display ads will be the next largest type of Internet advertising, capturing more than 20% of worldwide spending annually through 2011.