Although spending on on-line advertising was virtually flat between 2000 and 2001, Jupiter said it is faring slightly better than off-line. In fact, only cable fared better than the internet, which, Jupiter argues, “actually bodes well for the web as it increasingly adopts the niche-orientation of cable TV."
The firm reports that on-line classified ads will grow faster than any other form of on-line advertising this year in the US. Spending on these ads increased by 38% last year compared to 2000 and will increase again during 2002 to $1.2 billion.
Jupiter says the strong performance of on-line classifieds in the overall weak market is due, in large part, to an increasing shift of off-line revenues online. It estimates that spending will increase to $2.3 billion by 2007.
Jupiter analysts forecast that, ultimately, on-line advertising will account for 7% of the off-line ad market spending in the US. Factors driving the growth include increased broadband penetration, a sustained growth of the on-line population, media consolidation and general economic recovery.