Interactive Classified & Vertical Advertising revenues to reach US$14.7 Billion by 2012.
May 16, 2008
While online advertising has been propelled primarily by search, banners, e-mail and lead generation, The Kelsey Group expects verticals to emerge as a key driver of online advertising by 2012. Based on trend analysis, the firm forecasts the U.S. interactive classified and vertical share of online advertising will grow from 18 percent in 2007 to 24 percent by 2012. Revenues for interactive classifieds and verticals will grow from US$3.9 billion to US$14.7 billion during the same forecast period, representing a 30.5 percent compound annual growth rate (CAGR).
“Vertical businesses are harnessing the network effects of the Internet, much like Expedia and others did for travel in the late 1990s,” said Kelsey Group Program Director Peter Krasilovsky, cochair of Drilling Down on Local ’08. “We’re seeing an accelerated effect from fragmentation, which will draw ad revenue from traditional media toward online vertically targeted solutions.”
During the forecast period, U.S. online classifieds will grow from US$3.9 billion to US$9.1 billion (18.6 percent CAGR) and online verticals (such as home services, home and garden, health care, legal and auto repair) will grow from US$100 million to US$5.6 billion (461.4 percent CAGR).
The growth of online classifieds and verticals is the subject of The Kelsey Group’s “Drilling Down on Local ’08: Marketplaces” conference, which takes place next week, April 30-May 2, in Seattle, Washington. More than 500 senior executives from across the online media industry will come together to explore the implications of the emerging vertical trend on local advertising. Among the nearly 200 companies participating are AutoTrader.com, Cars.com, Cox Enterprises, Fox Interactive Media, HealthCare.com, Hearst, LATimes.com, MapQuest, Microsoft, MMB Media, Mywedding.com, The Seattle Times Co., Spot Runner, Trulia, TurnHere, Verizon, Ward’s Automotive, Yahoo!, Yellow Book USA, Yellow Pages Group, Yelp!, Zillow.com and Zvents.
