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Web Advertising Expected to Double

As a result of this growth, the Internet is expected to become a mainstream advertising platform that attracts top dollars from advertisers, one analyst believes.
Internet advertising is expected to account for 10 percent of the overall U.S. market by 2010, a twofold increase over last year, a market research firm said Thursday.

In five years, revenues from online advertising will reach $23.5 billion out of the estimated $235 billion companies are expected to spend, Park Associates said. Last year, Internet advertising accounted for 5 percent of a $189 billion market, which includes newspapers, magazines, cable TV and network TV.

In terms of a compound annual growth rate, online advertising is projected to increase 14 percent over the next five years.

As a result of this growth, the Internet is expected to become a mainstream advertising platform that attracts top dollars from advertisers, Harry Wang, research analyst for Park Associates said.

While taking advantage of the Web's superior ability to target and engage consumers, advertisers are not expected to abandon traditional media, which carry advantages in building a brand and promoting products.

"Advertisers need a good mixture of advertising vehicles in order to achieve the best benefit from communicating brand messages and promotions to their audiences," Wang said.

Nevertheless, some shift in spending will occur. Many large companies with familiar brands, including Anheuser-Busch, Procter & Gamble, Verizon, and Wachovia, have already started moving money to the Web from network TV, Wang said.