The latest ad spend forecasts contain some bad news and some good news for online ad spending, with this year still looking pretty gloomy as 2010’s promise of higher spending seems almost assured. Cowen has kept its projections from last spring, saying that U.S. online ad spend will fall 5 percent, but expects a rise of 6 percent in 2010. Meanwhile, Aegis’ Group’s Carat has downgraded its global online ad spend forecast, saying that it now anticipates a slim 1 percent gain for 2009 — it previously said web ads would be up a more healthy 6.3 percent. At the same time, Carat has slightly upgraded its 2010 forecast: it had thought that online would rise 8 percent; it’s now calling for an 8.3 percent increase in spending on the web.
Cowen: Citing anecdotal conversations with agencies, the financial analyst finds some signs of optimism regarding advertisers’ interest in spending more on search and display. From the looks of those conversations, it looks like portals will continue to struggle for scraps, as the bulk of online ad spending will go towards Facebook, search, and content websites such as WSJ.com, WebMD (NSDQ: WBMD) and CBS Interactive (NYSE: CBS). Portals’ may decline between 13- and 19 percent, as display dollars for that segment fell between 11- and 20 percent in Q209.
Positive signals in the UK: The total UK ad market fell 16.6 percent year-over-year during the first six months of ’09, as online spending there grew 4.6 percent. Cowen also pointed out some important differences in the advance of web ads between the U.S. and the UK. For example, online advertising accounts for 24 percent of the total UK ad market, compared to 9 percent in the U.S.; search advertising accounts for 14 percent of the total UK ad market, compared to 5 percent in the U.S.
Search: The day is approaching when search will comprise 15 percent of the global ad market, up from 5 percent today, Cowen says. It believes that online advertising will eventually make up 25 percent of the total ad market, based on the historical experience of TV’s market rise. Search will continue to account for more than half of the online ad market, based on the high and measurable returns offered by the medium. In the U.S., search accounts for 5 percent of total ad budgets and display’s share is 3 percent of the market.
Carat: In keeping with Carat’s more rosy outlook than Cowen, the media agency noted that online advertising remains the only area of the media that will see global growth this year, although the gains are extremely small. The main drag is coming from the U.S. and Western Europe. Online growth remains in double digits in the markets of Asia-Pacific and Central and Eastern Europe this year. In all, online’s share of the global ad market will reach 10 percent this year, but that has as much to do with the category’s growth as it does with the general decline of media, such as newspapers and magazines. Carat has revised its total global ad spend figures down as well, saying that worldwide expenditures this year will fall of 9.8 percent from the 5.8 percent drop it was predicting in March. Release

Comments have been disabled for this post