Online ad spending to remain strong in 2006 - Growth conservatively pegged at 24% - Piper Jaffray's Safa Rashtchy
Safa Rashtchy’s newsletter is one of my Monday morning must reads. If you are interested in tracking trends in online commerce and advertising. This morning’s edition contains a forecast of continued growth of online advertising in 2006 following discussions Piper Jaffray’s analysts have had with large ad agencies. The forecast pegs that growth at 24%, as compared to 36% in 2005 - and categorizes the estimate as potentially conservative.
Key facts mentioned in the report were:
- Auto, Finance, & Entertainment Advertisers expressing strong demand, and Healthcare is starting to shift budgets online (this can only be positive for healthcare vertical search engine Healthline that just pulled in a large round – congrats to friend Tony and team).
- Agencies expect pricing to increase 15%-20% for high-demand inventory
- Inventory shortages do not appear to be an issue (this refers to a previous news that the inventory of top Internet sites were fully sold out).
- Ad networks primarily utilized for direct response today, but are beginning to get more branding dollars.
- Video ads the next big ad format - expecting 2 or 3x the CPM of traditional banner ads.
- Search demand remains strong; ROI becoming more challenging.
- Web design and analytics experiencing increased demand.
I've seen others blog about his newsletter too. How do I get on the distribution?
Posted by: Peter Caputa | January 23, 2006 at 02:39 PM