Companies are Spending More on Online Advertising

U.S. online ad spending is expected to reach 20.2% of all advertising spending this year, and is expected to remain in the double digits through 2014. By 2015, total online ad spending should reach $50 billion.

The popularity of sites like Facebook, Yahoo! (NASDAQ:YHOO), and Google (NASDAQ:GOOG), which account for a large percentage of the time Americans spend online each day, has led companies to invest billions in advertising on the sites. Search will add $2.38 billion in advertising spending just this year. And all of the aforementioned sites offer banner advertising, which has been gaining business as well, but video stands out as the fastest growing format. According to an analyst for eMarketer, “Video advertising continues to attract new ad spending from brands because it generates greater audience attention than other digital ad formats.”

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Online advertising has also picked up for small and medium-sized businesses (SMBs) as they move away from advertising in local newspapers and yellow pages. In 2011, the five largest ad-selling companies — Microsoft (NASDAQ:MSFT), AOL (NYSE:AOL), Google, Yahoo!, and Facebook — will bring in 68% of all online advertising spending.