Thursday, January 3, 2008

Online Display Ad Market To Hit $8.6 Billion, Yahoo Will Dominate

From Online Media Daily - GET READY TO PAY MORE for both premium and remnant display ad inventory. JP Morgan is forecasting the U.S. graphical ad market to hit nearly $8.6 billion this year--a 20% increase from 2007, with much of that cash flow being driven by costlier CPMs. What's going to fuel the price spike? According to analyst Imran Khan, the 4% growth in CPMs will stem from a cocktail of factors, including less abundant (and possibly devalued) offline inventory, improvements in behavioral and geographical targeting, and the increased use of ad exchanges.

Khan said that local broadcast and cable inventory will be "tight" in 2008, as presidential campaign ads will absorb many of the available spots, and the increasingly scattered TV market will contribute to more ad dollars shifting online. And we expect newspapers to continue to bleed circulation and ad revenues to the Web.

Meanwhile, Web publishers will get better at monetizing their inventory via improved targeting, migration to ad exchanges and sites like social networks increasing the number of ads per page. In 2007, some 83% of graphical inventory was sold for less than $1/CPM, according to Khan--so if a publisher improves its yield even by a few cents, it can have a tremendous impact on revenues. | Read full article

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