It has been revealed in a report carried out by eMarketer that ad spend in the US will surpass that spent on print advertising in 2012, reaching nearly $40 billion, a 23.3% growth from 2011.
Due to the tough economic climate, advertisers are choosing to spend their budgets as wisely as possible and due to the great returns and ability to track ROI, online advertising is where they will be focusing a lot of their spend over the next few years.
It is predicted that the level of percentage growth is going to decrease after 2012 but the amount spent is estimated to increase each year until it reaches $62 billion in 2016.
In 2012 it is predicted that the amount of money spent on online advertising will exceed that spent on traditional print advertising for the first time ever. The gap between the two is due to increase over the coming years with the predictions for 2016 being $62 billion spent on online advertising vs. $32.3 billion on magazine and newspaper adverts.
eMarketer also predicts that over the next 4 years the gap will close between online ad spending and that spent on television advertising, with a difference of just $10 million in 2016 ($62 billion online vs. $72 billion on television adverts).
This is also the case in the UK as it has been reported that businesses are losing confidence in traditional media such as TV, press and radio advertising in favour of online channels, according to the latest Bellwether survey.
Even though businesses are choosing to reduce their investment in the main media channels, online advertising has actually grown by the largest percentage of all sectors and within that division, search has grown by the most.
Chris Williamson, author of the Bellwether survey and Chief Economist at Markit said: “there are signs that companies have become increasingly reluctant to invest in traditional media campaigns, instead diverting money towards the internet and direct marketing. This reluctance reflects lower than expected sales and profits in recent months, as well as growing unease about the economic outlook.”
It will be interesting to see how these predictions pan out in 2012 and how the advertising landscape changes as more businesses choose to spend more of their budgets online.