Piper Jaffray: Global Online Ad Industry Worth $81.1 Billion by 2011


The global online ad industry could hit $81.1 billion by 2011, according to a lengthy report released by research firm Piper Jaffray & Co.

“The User Revolution” looks at the Internet as a form of mass media and anticipates a 21% annual growth rate through 2011. Piper Jaffray believes the major Internet trend is towards consumers, who will increasingly take control of content and branding. Search revenues are also expected to reach $21.5 billion in the same year.
“The historically passive consumer is changing rapidly, not only becoming more informed and confident about purchase decisions, but also increasingly taking control of the consumption of information and content that used to be distributed by networks, studios, publishers and retailers,” said analyst Safa Rashtchy in a statement.

Piper Jaffray points out the increasing number of user-generated content sites like YouTube, MySpace and Flickr. The firm says that Internet usage patterns are changing, moving traffic away from traditional web portals to these types of sites which the firm as dubbed “communitainment” sites.
Piper Jaffray also believes that media is becoming increasingly fragmented, meaning that advertisers will have to buy more and more inventory in a variety of different mediums to gain the impact they want. The company also says that search will play a more prominent role and that online video will see more advertising growth as ad dollars shift away from traditional media.

“We expect the User Revolution, which has just begun to last several years before the new regime is fully established and the old statues have all been toppled over,” Rashtchy added.


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