December 16, 2005 7:08 AM PST

Online-advertising budgets to keep growing

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Online display and search ad spending is projected to grow at an annual rate of 10 percent over the next five years, according to a new study.

The automotive, media and financial-services industries are expected to lead the way in total advertising spending. The annual increase in automakers' Web ad spending will be 24 percent, while the travel industry should see a 13 percent increase through 2010, indicated a JupiterResearch study released Thursday.

The research firm said advertising agencies and publishers who want to do well should be sensitive to each industrial sector's needs. Marketers, for instance, want an integrated approach to their online and offline campaigns.

"Agencies that can devise and manage integrated campaigns stand to gain more from rising ad budgets," David Schatsky, a JupiterResearch senior vice president, said in a statement.

Agencies should also know which ad categories in which their clients are most interested. Companies selling consumer packaged goods, so far not big spenders on online ads, will spend 83 percent of their online-advertising budgets on display ads in 2010, JupiterResearch predicts. Companies selling health products, however, will focus their online efforts on search ads.

The study also showed that telecommunications, media and entertainment, and finance companies currently account for nearly half of all online display and search advertising spending.

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what does 10% growth mean?
Starting at what baseline? $100 million? $1 billion? $10 billion?
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CPG vs. Health Products
I wonder why CPGs (Consumer Packaged Goods) will focus more on display ads and companies selling health products will focus on search (text) ads? I think, perhaps, consumers of health products associate display ads with cheap, gimmicky products where as text ads are seen as less obtrusive and more informative.

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