Interactive advertising starts making headway

Interactive advertising starts making headway

Internet the catalyst for rapid growth and strength against traditional media

The global advertising market grew to just over $US600 billion in 2007, according to The Kelsey Group. The research firm expects global ad revenues to grow at a compound annual growth rate (CAGR) of 2.7 per cent and reach $US707 billion in 2012, propelled in large part by considerable growth in the interactive segment.

According to The Kelsey Group's Annual Forecast (2007-2012): Outlook for Directional and Interactive Advertising, interactive advertising revenues will increase significantly from $US45 billion in 2007 to $US147 billion globally in 2012, representing a 23.4 per cent CAGR.

In Australia, interactive advertising revenues will grow from $US1.2 billion in 2007 to $US2.9 billion in 2012 (20.5 per cent CAGR).

"It's no surprise that the global advertising industry is experiencing a full-scale shift to mixed-media platforms, with interactive driving a significant share of overall industry growth," said Matt Booth, senior vice president, interactive local media, The Kelsey Group. "We see Internet development -- including increased subscriber/user access and broadband penetration -- as a driver of both interactive advertising revenue as well as migration of traditional ad spending to new media platforms."

Interactive advertising, which comprises search (including local search), display advertising, classifieds, and other interactive ad products, grew its share of global advertising revenues from 6.1 per cent in 2006 to 7.4 per cent in 2007. Kelsey Group analysts expect that by 2012 the interactive share of global ad spending will reach 21 per cent.

The Kelsey Group forecasts directional advertising, which comprises local search, print Yellow Pages and Internet Yellow Pages (IYP), will grow from $US33.3 billion in 2007 to $US41.4 billion globally in 2012 (4.5 per cent CAGR). In Australia, directional advertising revenues will grow from $US1.3 billion in 2007 to $US1.8 billion in 2012 (6.7 per cent CAGR).

Len Rust is publisher of The Rust Report

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