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Online Ad Spend May Hit 25 Percent of Budgets

16 Jan, 2013 By: Doug McPherson

NEW YORK – Here’s a major milestone that might hit in 2013: one out of every four dollars spent by U.S. advertisers may be spent on online advertising, says the equity research team at J.P. Morgan. The company says advertisers are shifting budgets from analog media to reach consumers using digital media like smartphones and other mobile devices, along with social media like Facebook.

“As consumer behavior and time spent online rapidly shifts towards mobile, we expect advertising dollars to follow,” Doug Anmuth writes in the J.P. Morgan report. “We are projecting Internet advertising in the U.S. to grow to $43.5 billion in 2013.”

That’s a 17.4 percent gain over 2012 online ad spending levels and puts online media at 25 percent of all U.S. ad budgets. Anmuth estimates about half of that growth will come from mobile Web ad spending, and without the mobile stimulus, online ad spending would grow only about 10 percent from 2012. After mobile, Anmuth says social media is driving growth because of its large and targetable audiences.

MediaPost reports analysts are bullish on Facebook because it’s working to capitalize on its reach, including several new ad formats. Much of Facebook’s 2013 growth is expected to come from expansion into mobile.

Anmuth says Facebook represented 40 percent of the growth in U.S. desktop display in 2012, but, in 2013, J.P. Morgan estimates Facebook’s total desktop revenues to decline 4 percent due to the shift to mobile.

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