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Weaker job numbers, more turbulence on Wall St., higher oil prices — a recipe for greater economic distress is all right there. But as these negative developments have been building for the past few months, online ad observers are ever-more confident that the space, which tumbled deep into recession with everything else in 2009, is poised to grow even higher this year than previously thought. eMarketer estimates U.S. online ad dollars in the U.S. will grow 20.2 percent in 2011 — up from its December projection of 10.5 percent gains.
Specifically, eMarketer says that the U.S. online ad market will hit an unprecedented $31.3 billion in 2011, up from $26 billion in 2010, when the market grew 14.9 percent.
The numbers come a few weeks after the Interactive Advertising Bureau released figures showing that total online ad revenues for 2010 hit $26 billion-another record-up 15 percent from 2009. Meanwhile, the IAB said Q1 spending continued to surge, rising 23 percent over the same period last year.
Separately, IDC analyst Karsten Weide forecast that U.S. display ad spending will continue to grow 13.3 percent to $8.3 billion in 2Q11 and 13.8 percent for the entirety of 2011, with total online 2011 spending coming out at $34.6 billion.
Either way, double digit growth is nothing but a major positive for the industry. So, what accounts for this buoyant view of online, even with all the negative portents hanging over the sluggish U.S. economy at large?
“The internet has become as fundamental as television to advertisers,” said eMarketer principal analyst David Hallerman in a note. More ad formats, such as video, and more channels, especially social media and mobile, are also key contributors to the spending gains.
What will all this ultimately mean for major publishers? While the shift to online from traditional media is assured, a retreat to recession means that lucrative branding campaign dollars, which have only recently started to enter into display advertising in a meaningful way, could shrivel up as the typical response to tougher economic times demands that marketers put more spending into ads that will lead to direct sales or consumer leads.
Still, given that the economy has been poor since the the recession was officially declared over several months ago, perhaps marketers have factored all that in, and the current spate of bad economic news represents the usual fits and starts of an economic slowly rebounding. In any case, the third and fourth quarters tend to be stronger than the first half of the year, so it’s entirely possible that eMarketer’s rosy outlook is on the money and that even the 10.5 percent growth that was predicted back in December was too conservative. Release