Combined pure-play and traditional media-generated Internet advertising will become the largest media advertising segment by 2011, surpassing broadcast TV and newspapers. Major brand marketers, such as Microsoft, Procter & Gamble, Ford and Sony, have been key drivers of this trend and shifted substantial portions of their ad budgets online in 2006. The shift in ad spending to the Internet is also being driven by technological advances and new services in, among other areas, advertising networks.¹

Blog Advertising

Blog, podcast & RSS advertising spend is expected to have grown at over 200% between 2006 and 2007. While a majority of blog and podcast sites employ contextual search engines, some of the more financially successful sites have aligned themselves with specialized ad networks, which also handle analytic and marketing support for their members.

As of September 2007, the blog search engine Technorati was tracking more than 106 million blogs. The geometric growth of the blogosphere has spawned a variety of blog formats across media devices and by media type (e.g. mobile, vlogs, editorial, photo, or diarist), supporting technologies (e.g. blog search engines, aggregators, and directories), and monetization tools (display ad networks, in-video advertising, and, more controversially, paid-for editorial).

The attention given to blogs by traditional advertisers has also grown at a rapid rate, especially since blog audiences tend to be relatively "stickier" than audiences of other forms of media. According to eNation, among people who have visited blogs, 43.2% said they have noticed ads, while 3 out of 10 in this group say they have clicked on ads. Blog advertising campaigns by large corporations such as Ikea have further raised the profile and interest in blog advertising.

Recent Trends

Developments in the online advertising are primarily being driven by advertisers' demand to target an increasingly fragmented market and by their pursuit of correlating analytical data to return on investment.

The industry is expecting the continuation of very healthy secular growth trends, while new models supporting advertising efficiency and new media formats are emerging on a rapid basis. Contextual and behavioral targeting are gaining traction, the acceptability of social media by traditional advertisers is increasing, and advertisers continue to call for standardization of measurement in display advertising.

¹Veronis Suhler Stevenson, Jul. 2007