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Marketers look to Web promos

May 02, 2008 | Internet Marketing

Marketers are expected to shift some online spending from traditional display or search ads to Web promotions, by nearly tripling their budget for contests, coupons and other interactive offers, according to a new report.

The interactive capability of the Internet is taking hold among advertisers and is about to eclipse traditional banner- and paid-search advertising, according to a new study from Borrell Associates Inc. to be released Tuesday, April 29. Over the next five years online promotions, including contests and coupons, is expected to triple from $8 billion last year to more than $22 billion by 2012.

Currently non-ad online spending is only 22 percent of the total $37 billion spend in online advertising. But that’s about to change, more in line with total marketing expenditures. Of the total $806 billion spent in marketing, 60 percent of the dollars are allocated to non-ad spending versus 40 percent allocated to traditional advertising.

For the past two years, spending on online display ads, banners and pop-ups has been flat. The ad format is forecast to peak this year at $12.6 billion, and then begin to decline to less than half that amount over the next four years. Paid search is facing a similar spending trend, peaking next year at $16.9 billion and then gradually declining.

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