Political Advertising Online: Prez Races May Devote 5 Percent On Money Online

Even though political advertising has yet to materialize in any big way online in the ongoing Presidential primaries in U.S., analysts are hopeful in direct and indirect ways of spending and influence. Lehman analyst Doug Anmuth came out with a report this week on political advertising online, and estimates that these ads could generate more than $110 million in revenues this year, with the Presidential elections contributing $42.5 million of that amount. This is small compared to total election spending in excess of $3 billion in 2008, and Presidential spending estimated to reach $850 million. But the trends are that the online spending is incremental and campaign advertising will increasingly shift online going forward, the research note says.

Some other points from the report:
— About 3.6 percent of 2008 political advertising will be spent online with the presidential campaigns likely to devote 5 percent of their estimated spend online, with the remaining races and political issues likely to spend 3 percent of their ad budgets online.
— Major publishers such as Yahoo (NSDQ: YHOO) and others are likely to benefit not just from campaign advertising, but also from increased traffic and engagement across their News and Elections coverage.
— Yahoo is likely to benefit from both campaign advertising and increased traffic, while Google (NSDQ: GOOG) is likely to benefit from political keyword sales.
— Internet penetration of campaign advertising is likely to double by the 2010 mid-term elections and potentially reach double digits by the 2012 presidential elections.

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