Monday, December 12, 2005


FUTURE: Analyst says newspapers will have to accept lower margins
ORIGINALLY POSTED: December 08, 2005

Web Advertising Expected to Double Its Take Of The Overall Market In Five

By Antone Gonsalves InternetWeek

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.

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