Tuesday, December 06, 2005
Piper Analyst Predicts 27% Annual Compound Growth Rate For Online To 2010
byA new review of the online sector by Piper Jaffray Senior Research Analyst Safa Rashtchy predicts that internet advertising will grow at an annual rate of 27 percent through through 2010. And, according to the story in Adweek Magazine, Rashtchy says these estimates could prove conservative. To put this in perspective, using the finance rule of 72, it means the amount spent on internet advertising will double every 2 years, 8 months!
What is interesting about these figures is that they are coming from the “money” sector (brokerage firm) rather than other similar projections that have been originating from marketing and online industries. Estimates predicting this kind of growth are sure to heat up even more investment interest in this sector. However, unlike the dotcom bubble, that was based on wild speculation, the growing investment interest in the online arena today is based on real growth and tangible economic evidence.
The article goes on to say that many large corporations are already spending 20 percent of their marketing budgets online. At a 27 percent annual compound growth rate, that means many of these companies will be spending about 50 percent of their budgets online in just over 3 years. In addition, previous reports this year indicate that B2B online spending is, in many cases, already becoming the predominant marketing/advertising method along with personal selling and trade shows.
