Businesses may boost spending on all forms of advertising by just 5 percent next year, but online advertising is expected to post double-digit growth, thanks to a surge in local and targeted advertising, analytics and consulting firm Borrell Associates projects.

Borrell forecasts that outlays for local online ads will grow by nearly 18 percent next year, to $16.1 billion, and that spending on targeted display ads will grow by nearly 60 percent, to $10.9 billion.

"The fastest-growing segments of online advertising are the local sector, anything targeted, and everything involving social media," the company said in releasing its 2011 online advertising forecast.

Growth like that could help push total spending on online advertising up 14 percent in 2011, to $51.9 billion. But that would still represent only about 22 percent of overall spending on advertising, marketing and promotions.

With one in four cell phones now a Web-enabled smart phone, mobile ad sales are expected to snag 20 cents of every online ad dollar spent next year, Borrell said.

While advertisers continue to spend more money online, not all forms of online advertising are experiencing growth.

Borrell expects "run-of-site" display ads to continue to fall out of favor, with spending falling almost 14 percent, to $8.2 billion. Run-of-site ads — which may appear in rotation in a website’s unsold advertising slots — have been overshadowed by newer, more productive ad formats, Borrell said, and competition has pushed display unit prices down.

Lower prices and "churn" could also drive an 11 percent decline in national advertisers’ spending on paid search ads, Borrell predicts.

But e-mail advertising is expected to grow by 9 percent, to $16 billion, thanks in part to white papers that are popular with business-to-business advertisers.

Spending on streaming video ads is also expected to grow by more than 60 percent, to $5.6 billion, as inexpensive and do-it-yourself tools put the format within reach of small advertisers. Borrell expects about 40 percent of spending on streaming video ads to come from local advertisers.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription