Online ad spend to reach $18.9bn

Online advertising is set to double in value over the next five years, with search engine marketing soon beating traditional display advertising, such as hoardings and billboards, for ad spend.

Analyst house JupiterResearch is predicting that by 2010, advertisers will be spending $18.9bn to capture internet users' eyeballs, compared to $9.3bn in 2004.

The growth, according to the analysts, is partly advertisers' growing faith in the internet as a medium but also increasing desire to exploit the ad possibilities of search engines. Search engine marketing will grow 12 per cent year-on-year until the end of the decade, JupiterResearch found.

Classified ads will also be up for a 10 per cent increase in value, reaching $4.1bn by 2010.

As well as a change in the sheer volume of cash being lavished on advertising, ad formats will undergo a transformation, with streaming ads growing at a compound annual growth rate (CAGR) of 30 per cent, to $943m in 2010, while rich media ads will expand at a CAGR of 25 per cent, reaching a value of $3.5bn at the end of the decade.