Summary:

Online advertising will grow 4.3 percent in the U.S. this year — as total ad spend plunges 7 percent — but it could shoot up 20 percent ne…

imageOnline advertising will grow 4.3 percent in the U.S. this year — as total ad spend plunges 7 percent — but it could shoot up 20 percent next year, said Mark Mahaney, director, Internet Sector for Citigroup Investment Research. Speaking at the IAB Annual Conference. Without the internet, U.S. advertising would be down 10 percent. But online could be saved by the misery of other media formats, as newspapers close, Yellow pages decline and direct response faces higher postal rates and the possibility of Saturday delivery ending. In all, spending on those categories total about $125 billion — meaning that a sizable portion is up for grabs for online.

Silver lining for online: Last year, $25 billion was spent on online ads. And while newspapers, Yellow Pages and direct mail each garnered billions more, the trouble facing those industries will surely send more dollars to the web, helping to offset the wider recessionary pressures, Mahaney said. Still, he expects that the online travel category will be particularly hurt from the general pullback in ad spending, as “we are only half-way through the current job-loss period.”

Mobile hope: There were 4 billion handsets in use around the world — that also presents opportunities for digital. Mahaney suggests that if there were only 10 searches per month per mobile phone, that would eventually equal what PC online advertising spend attracts.

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