Online classified, vertical ad spending boom predicted

Online classifieds and vertical ads in the United States will make up about a one-fourth of all net advertising in four years, predicts the Kelsey Group.

The Princeton, NJ-based research company anticipates online classified and vertical advertising, which combined now business relationship for about 18 percentage of online ad spend, will reach 24 percentage by 2012. Meanwhile, revenues for interactive classifieds and verticals -- called "marketplaces" by Peter Krasilovsky, Kelsey Group's program manager of marketplaces, will reach $14.7 one million million by 2012, according to the firm.

"Verticals have typically been dominated by the big three of auto, real estate and [employ] recruitment," said Krasilovsky. "With the new capableness of Web 2.0 characteristic such as user-generated-content and easy, self-serve capabilities so people can set up their own ads, we see a figure of additional vertical categories really ramping up their ad in the next five-year period."

Krasilovsky said the list of growth verticals "goes 20 deep," but includes local health care and financial services, as well as legal services.

Kelsey Group's findings, released today, are included in its new "Global Interactive Ad Spend and Interactive Classifieds prognosis." The written document predicts U.S. Interactive classified ad, now at $3.9 one million million, will reach $9.1 one million million by 2012 and U.S. Interactive vertical ad, now at $100 1000000, will reach $5.6 one million million by the end of the same time period.

The study predicts similar growth in most state. By the end of 2007, interactive advertising constituted 7.4 percent of the global ad marketplace, up from 6.1 percentage at the end of 2006, according to the Kelsey Group. By 2012, the interactive share will reach 21 percentage globally, said the company.

Krasilovsky said there are many small, local businesses that advertise "but a lot haven't been disbursement much money on net...because they haven't really found it easy to do and because it hasn't been specifically applied to their businesses."

As an illustration, he said a garden center might have used the Yellow Pages to advertise, with mixed results, but not the Internet. However, such a company would likely spend money to buy interactive ads on a Web site that focused on gardening or garden-center needs.

"That's what we are seeing," he said. "Whole new marketplace categories. Specialist categories. It's a real interesting phenomenon."