Despite worries about Europe’s financial problems over the past few weeks, expectations for online ad spending this year are continuing to rise. Just two months after researcher IDC projected U.S. online ad spending to shoot up 12.6 percent by end of 2010, it has now raised that number to 19 percent to $31.5 billion. The change follows a string of surprisingly strong numbers for all segments of online advertising, even display, which had been in decline for the past two years. As for individual categories, like mobile, IDC expects a significant rise, but despite the best efforts of Google (NSDQ: GOOG) and Apple (NSDQ: AAPL), it will remain small relative to other parts of the industry, at least for the next four years.
Last week, the Interactive Advertising Bureau said internet ad spending rose 7.5 percent in Q1 to $5.9 billion, which was a return to the familiar refrain of “another record-breaking quarter,” a phrase that had accompanied much of the organization’s reports before last year. Even before the doldrums of ’09, online ad growth rates had been slowing significantly since the days of 30- and 40- percent gains of the middle part of this decade.
Considering last year’s troubles, the robust online ad growth rates should hold steady as long the recovery maintains its pace. In the meantime, the biggest leaps in spending will continue to come from smaller segments of the industry, particular, video, which IDC expects to grow 40 percent, and mobile online ad, which could soar 97 percent from last year. Still, mobile will still remain small, which has prompted many industry observers to increasingly ask if the space will truly become a significant business versus general online ads. According to IDC, mobile ads will only rise to $1.6 billion by 2014.
IDC’s latest forecast also comes after eMarketer upped its U.S. online advertising spending estimate for 2010 to $25.10 billion at a 10.8 percent growth rate over last year