Online Advertisement In U.S. To Reach $62 Billion By 2016 [STUDY]

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Online Advertisement plays major role in shaping the brand values, revenue as well as profit for companies. Quite convinced with the fact, companies are also spending billions of dollars on the advertisement arm every year and its going to increase further more in coming years. Taking the view of online advertisement spending, a study was conducted which highlights that by the end of 2012 online advertisement spending will reach $40 billion U.S. and is expected to grow to $62 billion by 2016.

Online Advertisement is mainly classified into three formats namely search, banners and video. As the industry is witnessing great shift across the globe and infrastructure is improving, all the three will be responsible for 80% of online advertisement revenue by 2016.

Search based advertising will maintain its legacy as the leader with around 46.9 percent by 2016 followed by banners’ 20.5 percent contribution. However, it is expected to shift down its share by 2.5% in 2016 compare to 2012.

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Surprisingly, online advertising through video will emerge as most attractive channel as its spending share will surge year-over-year to reach 15 percent by 2016.

Study reveals that advertising expenditure will increase exponentially year-over-year and is expected to touch $62 billion by 2016 – rise of $22 billion compared to $40 billion in 2012.

Interestingly, Despite of having highest advertisement share, Video format will see sharp decline by 2016. But 2012 is going to be the most effective year for video as it will touch the highest growth ever in the said year. From 42.1% in 2011 to 54.7% in 2012 and then decline towards 18.1% only in 2016 speaks about video format rise and fall in next few years. This will be mainly due to the upcoming U.S.presidential election and Olympic Games 2012.

Though, the contribution of email advertisement channel will be quite low by 2016, but it is expected to be the only channel that will record positive year-on-year growth. In next five years, Email advertisement trend will move up from negative value to 3.8% growth in 2016

Online advertisement is continuously dominating over traditional advertising for last half a decade. It has emerged as one of the cheapest but the most effective modes of advertisements. It is a multi-way process compared to direct marketing which is generally confined into traditional style of promotions. Considering the success achieved by companies from online advertisement, many other old styled marketers are showing their interest in online advertisement and burning fresh blood of cash into it which will be the prime reason behind such astounding growth.

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I feel online advertisements help users as well as companies to know the feedback about their products in short span of time. Apparently, advertising on social networking sites has been increased in an enormous rate as social media is a place where an advertiser can make their product available to more than billion of the users in short time period.

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