Online Advertising - Outlook For Online Advertising

OUTLOOK FOR ONLINE ADVERTISING

Although revenue from online advertising has consistently grown more than predicted, the online advertising industry faces many challenges. Operators of online ad networks like DoubleClick and 24/7 have yet to turn a profit. Low click-through rates and the difficulty of measuring ROI for advertising dollars are symptomatic of a larger problem: the lack of standards for measuring online ads. The IAB has made the development of such standards a top priority, and one the industry must address in 2001. Without them, advertisers and their agencies will be reluctant to commit to online advertising as part of their marketing mix. Other problems facing the online advertising industry include the general slowing of the Internet economy, the dot-com shakeout of 2000, and tighter budgets at the surviving dot-com companies.

In spite of these obstacles, a report from Forrester Research predicted that the amount traditional U.S. companies will spend on digital marketing campaigns, which include online advertising, promotions, and e-mail marketing, will increase from $11 billion in 2000 to $63 billion in 2005. Spending on online advertising alone was projected to increase to $42 billion worldwide by the end of 2005. Among nearly 60 vendors surveyed for part of its report, Forrester found that the amount spent on online marketing per company would double by 2003.