Outlook for 2012:
Growing double by digits
Even as other media stumble online continues to soar
By Toni Fitzgerald
Dec 22, 2011
Internet ad spending zoomed to new heights in 2011 and it will do so again in 2012, with search and social media becoming an increasingly crucial part of advertisers' spending mix.
While forecasters tempered their predictions for ad growth for nearly every other category over the past month,
they remain bullish about online, and for good reason.
The future of every form of media lies online in some form or another, from magazines on mobile phones to cable TV shows on e-readers.
Social media advertising also took off this year, and it will make up an increasingly large share of online advertising going forward, much of it from Facebook, which will surpass Yahoo to become the No. 1 platform for display advertising this year.
The world's largest social networking site will take in $3.8 billion in ad revenue this year, more than double its 2010 total, reflecting advertisers' growing comfort with sometimes unpredictable social media.
"Facebook has become one of the premier online media destinations, not just for consumers, but for advertisers,"
eMarketer analyst Debra Aho Williamson told Media Life earlier this year. "They see Facebook as almost a must-do along with the other portals. That's a shift."
Next year will be highlighted by experiments in social media advertising, with Twitter expected to roll out several new platforms and Facebook rumored to be offering mobile advertising for the first time.
Still, while advertisers are attracted by the idea of social media, the reality is not always what they'd hoped for.
"One major problem agencies face when considering advertising campaigns on social media is knowing exactly who they are reaching," says Michael Hussey, CEO of PeekYou, a people search engine.
"For example, Martha Stewart has 2.5 million followers on her
Twitter account and 258,000 fans on Facebook. But who are those people? Do the demographics, interests, income and education levels match the targets of the proposed campaigns? Not knowing the audience and the audience’s reach and influence are key factors keeping many potentially successful campaigns from ever getting off the ground."
If social media will be one defining aspect of 2012 online advertising, the other will likely be mobile.
The growth of geo-location sites such as Foursquare, which invite users to inform the people on their network where they are, will make targeting local ads much easier.
Moving forward, much of what we now consider online advertising will become mobile advertising as people move away from desktop computers and toward portable devices such as smartphones and e-readers.
Mobile growth will be especially strong at the local level, where small business owners are eager to jump in on the trend for two major reasons.
"Mobile is cheap and it provides almost instant results,"
Gordon Borrell, chief executive officer at Borrell Associates, told Media Life earlier this year.
As for just how much online ad revenue will grow next year, forecasts vary but the general sense is that it will be up double-digit percentages.
Pivotal Research predicts that spending will rise 13.9 percent for national digital and 9.3 percent for local, while London agency ZenithOptimedia pegs overall growth at 16.4 percent.
|
Internet
Advertising Revenue
2012 ($ Billions) |
|
Media |
Spending |
% Change |
|
Display |
5.562 |
12.0 |
|
Video/Rich Media |
4.205 |
26.0 |
|
Classified |
3.653 |
6.0 |
|
Paid Search |
13.929 |
15.0 |
|
Internet Radio |
315 |
10.0 |
|
Podcast |
40 |
11.0 |
|
Social Media |
1.325 |
36.0 |
|
Mobile |
1.234 |
48.0 |
|
TOTAL INTERNET |
30.253 |
16.4 |
|
Source: ZenithOptimedia |
|
|
|
