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Interactive advertising expected to explode

Written on
Apr 28, 2009 
Author
Edward Barrera  |

hispeed.jpgADOTAS — Paid search clicks might be down so far this year, but pockets of good news for online advertising seems to be popping up here and there.

While U.S. retailers’ online sales rose 11 percent on average compared to the same period a year ago, Citi Investment Research projects that US retail e-commerce sales will grow 4.4 percent in 2009 to $141 billion—and jump to 16.5 percent growth in 2010. Video advertising is predicted to generate $1 Billion by 2011, and according to Forrester Research, overall Interactive advertising is heading for growth over the next seven years.

Market Vox says that Forrester predicts interactive online advertising, display, email, mobile, search, and social media, will experience a 17 percent compound annual growth rate, totaling almost $55 billion in spending over the next seven years.

Five key online advertising channels will see the following upswing:

social media – 34 percent.
mobile – 27 percent.
display – 17 percent.
search – 15 percent.
email – 11 percent.

Now obviously social media and mobile marketing have the largest growth because there is so much room for it to grow, and the opposite reason could be given for search and email because they have owned the market for so long. (Though I am surprised at the display number).

As for search, according to Internet Retailer, during the first quarter of 2009, the average volume of paid search clicks was down 9 percent compared with Q1 2008. According to research from NetElixir, an online advertising management firm, the average cost per click was down 7 percent year over year. On the bright side, the average click-through rate was up though 7.5 percent in first quarter of 2009 versus Q1 2008, and the average search ad conversion rate was up 5 percent.

– Express your opinion, comment below.





Edward is the former editor of Adotas.

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Before that, he was metro editor and city editor for the San Gabriel Valley Newspaper Group, where he was in charge of local news. Besides managing daily content, including multimedia, he oversaw investigative stories. He also led a team in revamping the group's website.

Before that, he was a reporter and blogger, covering business, politics and government for newspapers in New York and California.

Reader Comments.

What about performance marketing? i.e. affiliate marketing, cpa lead gen, etc? Why does this channel get ignored by IR? Every major online retailer has an affiliate program and many of those generated 5 – 20% of total revenue and growing!

Posted by Linda Woods | 12:52 pm on April 28, 2009.

The previous poster said “what about performance marketing” EXACTLY! We have seen tremendous growth in CPA advertising. Even, maybe especially, in this economy advertisers expect results and accountability and CPA provides that. It is the tremendous avenue for growth.

Posted by Sue | 8:46 pm on April 28, 2009.

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