Spending On Internet Advertising Is Skyrocketing

Worldwide, companies are recognizing the value of Internet advertising as annual spending nears $100 billion

Internet Advertising Slide

Spending On Internet Advertising Soaring

Companies around the world are increasingly recognizing the value of Internet advertising. At least the spike in spending for Internet advertising certainly indicates a rising perception of value.

Internet advertising hit $84.8 billion in 2011, representing a 16 percent increase over the previous year. Internet advertising now accounts for more than 17 percent of all global advertising spending, according to a new report from media buying firm Group M.

The Group M Study predicts that Internet advertising spending will reach $98.2 billion globally in 2012, an increase of 16 percent over 2011. The predicted 2012 spending for Internet advertising represents almost 19 percent of all measured worldwide advertising investment.  According to the forecast, North America will again rank first in the world, spending an estimated $38 billion in Internet advertising. Asia-Pacific follows with $31 billion followed by Western Europe with $23 billion.

Key Findings of Ad Spending Study

  • Internet advertising rose from 4 percent of total ad spending in 2004 to a projected 19 percent in 2012.
  • The average percentage of consumers’ “media time” spent online increased from 11 percent in 2006 to 19 percent in 2011.
  • The absolute number of broadband homes worldwide has nearly tripled in this period to reach 500 million, and the typical country has seen broadband penetration grow by half.
  • Aside from general monetary inflation, ad investment growth has two main vectors: aggregate audience hours, and advertising intensity per individual. Average Internet advertising spending per Internet user doubled between 2006 and 2011.
  • Norway had the highest per-capita online ad investment $200 in 2011.
  • E-commerce accounts for about 5 percent of global retail sales today, with instant-on devices, secure and simple payment, vouchers and the optimization of online retail for mobile devices serving as catalysts for growth.
  • Consumer tablet penetration reached double digits in only three of the survey’s countries in 2011: the US, Finland and South Korea. However, take-up is expected to be rapid and nine countries should reach double digit penetration in 2012.

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