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Global Online Advertising Industry Analysis 

The global online advertising industry continues to take up market share from the decline of the newspaper industry, which traditionally played a major role in local-scale promotion. Online advertising is also benefiting from the economic recession as companies seeking to tighten their budgets are cutting back on advertising costs by moving from traditional mediums toward digital means.

Global Industry Analysts estimate the world online advertising market will reach almost $73 billion by 2015, with market growth fuelled by widespread internet penetration across established and developing markets. More companies are opting for this kind of solutions to benefit from the medium’s simplicity and cost-effectiveness.

Regional Market Share

The US dominates the industry, reports Global Industry Analysts. Asia-Pacific is expected to outpace other regional markets, recording yearly growth of 15% until 2015.

Borrell Associates reports that in 2012 New York City’s online advertising market will exceed $1 billion. The desktop-based online and mobile media market segments will both continue to record growth in 2012. The former will likely decrease as mobile device penetration increases. By 2016, it is estimated that close to 90% of local advertising will be accessed through mobile devices such as smartphones, GPS enabled laptops and tablets.

The UK’s internet industry holds the largest share of ad expenditure at a national level when compared with the EU market, with over 30% of overall expenditure dedicated to online media, reports AM MindPower Solutions. The UK internet promotion business expanded almost 9% in 2010, driven by retail activity, higher broadband penetration and rising numbers of internet users. At the close of 2010, there was an internet-user base of over 40 million in the UK.

Japan’s advertising expenditure is forecast to remain low through 2012 due to its current phase of recovery from the country’s quake and Tsunami, and the economic recession. Japan’s online video ad market segment is expected to record annual growth of close to 5%, according to AM MindPower Solutions. The country's internet advertising market grew more than 8% in 2010, after a slow year in 2009. Moving forward, e-commerce is forecast to fuel growth in the country’s media sector. Japan’s search engine ad market segment continues to expand, driven by spendings from operators in the sectors of travel, distribution, real estate and finance. The display sector is expected to lose market share, having held half the market in 2005. This decline is partly due to public sector cutbacks. The mobile sector is expanding at the same rate as the online segment, driven by smartphone penetration, advertising by content providers and rising numbers of advertisers on social networking sites.

China’s online advertising industry is set to outpace print media advertising in the coming years. Baidu.com leads the country’s search engine segment, with Google in second place, reports AM MindPower Solutions. Market growth is being fuelled by China’s vast population, economic expansion, widening advertising budgets as well as increasing activity in online social networking, online video and the e-commerce sector.

Industry Leaders

Google’s mobile search advertising sector is forecast to reach almost $2.9 billion in 2016, reports Visiongain. Google is also leading the world mobile search sector, accounting for more than 95% of the overall market. The search engine’s success is thanks to the optimization of its services and expertise, and reactivity to accurate market trend foresight.

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