Investment bank Jefferies is raising its projections for global online advertising from $60 billion in 2010 to $70 billion, due to stronger-than-expected growth in Western Europe and Asia.
In a report, Jefferies analysts Youssef Squali, Hagit Reindel, and Naved Kahn said 2007 global online advertising would likely come in at $41 billion, a 31% increase from the year before and higher than Jefferies’ previous estimate of $38 billion. The bank is expecting online advertising to grow 26% on a compound annualized basis by 2010, up from its previous estimate of 22%.
U.S. online advertising will grow a bit slower, at a 22% compound annualized rate. Online will represent 10% of U.S. ad budgets in 2010, vs 7% today.
How about the weakening U.S. economy? Jefferies:
We believe that the online segment should fare better than the overall market. The magnitude of the impact depends on the severity of a recession (if one is upon us!). A mild recession is likely to be neutral for the segment, and therefore not alter our view materially. A severe one, on the other hand, could dramatically curtail growth rates. We do not anticipate a repeat of the 2000-2002 ad recession, however, considering the make up of the advertiser base, which is more diversified, with more viable business models and stronger balance sheets.
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