Online Ads to Outpace Other Categories

Online advertising will continue to outpace overall ad spending, growing 14 percent next year to $51.9 billion, according to a new Borrell Associates forecast released today.

In contrast, the overall ad market is expected to increase less than 5 percent to $238.6 billion.

The fastest-growing segment of interactive advertising will be local online, anything targeted and everything involving social media. In 2011, local online is forecast to grow nearly 18 percent from $13.7 billion to $16.1 billion.

Both national and local advertisers are expected to tap targeted display, driving the segment up 60 percent to $10.9 billion. While national advertisers are expected to increase their use of targeted display by nearly 50 percent, local advertisers will double their use of local display, reaching more than $2.3 billion next year.

In stark contrast to targeted display, run-of-site display will decrease, dropping 14 percent next year to $8.2 billion for both national and local online.

Also on the decline will be national paid search, dropping 11.3 percent.

E-mail advertising will experience moderate strong growth, up 9 percent to $16 billion for national and local with most of the growth coming from national advertisers and only 3 percent from local.

Advertising in video streams will also continue to grow, up more than 60 percent next year to $5.6 billion, with two out of every five streaming video ad dollars being spent by local advertisers. Streaming audio advertising will enjoy double-digit growth, but is still a small fraction of spending, yet to crack $1 billion in ad expenditures.

Online promotions will hit $24 billion next year, a 10 percent increase, due to the rising use of online coupons, expected to grow 14 percent to $9.1 billion.

Fueled by more apps, mobile marketing will gain momentum, commanding 20 cents of every online ad dollar spent next year.