July 3, 2012, 2:42 PM

U.S. digital ad spending will exceed $67 billion by 2016

Internet ads will command one of five advertising dollars by then, a report says.

Thad Rueter

Senior Editor

Lead Photo

Online advertising will account for 20.6% of all advertising in the United States by 2016,up from 14.0% in 2011, as digital continues to take marketing dollars away from print, radio and direct mail, according to a report this week from IDC.

The market research firm’s “Worldwide and U.S. Internet Advertising 2012-2016 Forecast” projects that marketers will spend $67.4 billion on Internet ads in 2016 in the United States, up from $35.5 billion in 2011, a compound annual growth rate of 13.7%. The report says that U.S. spending on Internet ads will overtake spending on print ads this year and direct marketing in 2014.

Western Europe, by contrast, will experience relatively little growth for spending on Internet ads, to $33.7 billion in 2016 from $25.6 billion in 2011, a compound annual growth rate of 5.7%. By 2016, online advertising will command 23.7% of all ad spend in Western Europe, compared with 18.4% in 2011, the report says.

Within online advertising, the balance of spend is changing along with consumer behavior, the report says. “In both the United States and Western Europe, we see a fairly steep decline of the market share of search ads caused by strong growth in mobile ads,” the report says, “while display advertising sees slight market gain, mainly due to strong growth in video advertising.”

In Japan, meanwhile, spending on Internet ads will increase to $12.2 billion in 2016, up from $8.6 billion in 2011, a compound annual growth rate of 7.2%. The market share for online advertising will increase to 23.9% from 16.3%.  Mobile, which already accounts for at least 20% of the mobile-obsessed country’s Internet advertising, will have a 25.1% market share by 2016.

Worldwide, Internet advertising spend will reach $144.8 billion in 2016, up from $87.4 billion in 2011, a compound annual growth rate of 10.6%.

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