Advertising and Search Forecast through 2009: Advertising and Search Forecast through 2009 Gary Stein Sr. Analyst, Jupiter Research


The advertising numbers: The advertising numbers


US Online Ad Market Surging: US Online Ad Market Surging Source: JupiterResearch Internet Advertising Model, 7/04 (US Only) (in billions) $0.9 $2.1 $3.5 $5.6 $5.8 $5.8 $6.6 $8.4 $10.7 $12.3 $13.8 $15.0 $16.1 Online Ad Spending


Online Ad Growth Significantly Outpaces Other Media: Online Ad Growth Significantly Outpaces Other Media Percentage Change in Spending, 2003 to 2004 Source: JupiterResearch Internet Advertising Model, 7/04 (US only)


Online Advertising Overtakes Magazine Advertising in 2007: Online Advertising Overtakes Magazine Advertising in 2007 Source: JupiterResearch Internet Advertising Model, 7/04 (US Only) Total Online Ad Spending (in billions) Percentage of Off-line Ad Spending


Rich and Streaming Media Will Quadruple by 2009: Rich and Streaming Media Will Quadruple by 2009 Source: JupiterResearch Internet Advertising Model, 7/04 (US Only) (in billions) $.6 $1.0 $1.5 $2.0 $2.6 $3.2 $3.8 Rich Media and Streaming Media Ad Spending


Display Advertising Rebounds on Increasing CPMs: Display Advertising Rebounds on Increasing CPMs Source: JupiterResearch Internet Advertising Model, 7/04 (US Only) US Display Ad Spending (in billions)


The search numbers: The search numbers


Paid Search Growth Remains Strong, But Beginning to Slow: Paid Search Growth Remains Strong, But Beginning to Slow Paid Search Spending Source: JupiterResearch Paid Search Model, 7/04 (US only) (in billions) $1.9 $2.6 $3.2 $3.8 $4.4 $5.0 $5.5


Paid Listings Continue to Dominate Paid Search Spending: Paid Listings Continue to Dominate Paid Search Spending Paid Listings Spending Source: JupiterResearch Paid Search Model, 7/04 (US only) (in billions)


Increasing Cost per Click Driving Spend Up: Increasing Cost per Click Driving Spend Up Cost per Clickthrough Source: JupiterResearch Paid Search Model, 7/04 (US only)


Local Search Will Grow More Slowly than Overall Online Advertising: Local Search Will Grow More Slowly than Overall Online Advertising Local Search Spending Percentage of Total Online Advertising (in millions) Source: JupiterResearch Local Search Model, 3/04 (US Only); JupiterResearch Internet Advertising Model, 7/04 (US Only)


Paid Search Will Experience Strong Near-Term Growth Before Slowing with Market Maturity : Paid Search Will Experience Strong Near-Term Growth Before Slowing with Market Maturity Total Paid Search Spending Percentage Year-on-Year Growth (in millions) Source: JupiterResearch Online Advertising Model, 5/04 (Western Europe only)


The drivers of growth: The drivers of growth


Always-Ons to Drive Search Growth and Utility: Always-Ons to Drive Search Growth and Utility How do you connect to the Internet from home? JupiterResearch/Ipsos-Insight Individual User Survey (05/04), n = 3,730 (US only)


Broadband is established in the installed base: Broadband is established in the installed base How long have you been on broadband? JupiterResearch/Ipsos-Insight Individual User Survey (05/04), n = 3,730 (US only)


Use Daily to avoid Info Lapses: Use Daily to avoid Info Lapses How frequently do you go online? JupiterResearch/Ipsos-Insight Individual User Survey (05/04), n = 3,730 (US only)


Users see results are getting more relevant; better: Users see results are getting more relevant; better Have SERPs gotten more or less relevant over the last 12 months? JupiterResearch/Ipsos-Insight Individual User Survey (05/04), n = 3,730 (US only)


People Happy…but with Concerns: People Happy…but with Concerns JupiterResearch/Ipsos-Insight Individual User Survey (05/04), n = 3,730 (US only)


Getting ready for 2005: Getting ready for 2005


Things to pay attention to in 2005, consumer edition: Things to pay attention to in 2005, consumer edition Vertical search Data-intensive jobs (doctors, architects, engineers) Sowing the seeds of search An interface and an index everywhere The coalescing of services into a platform With search as the core Searching audio and video A technology hurdle, to say the least


Things to pay attention to in 2005, business edition: Things to pay attention to in 2005, business edition Market compression, especially for contextual ads Fraud as a primary underminer of confidence Big player missteps, capitalized upon by small players The data market getting some controls


Thank you: Thank you Gary Stein Sr. Analyst, Jupiter Research www.steinblog.com