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Kelsey Group Predicts Growth in Interactive, Directional Ads

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Interactive advertising revenue in the U.S. will grow from $22.5 billion in 2007 to $62.4 billion by 2012, according to a new Kelsey Group report. Interactive advertising revenue, which Kelsey defines as search (including local search), display advertising, classifieds and other interactive ad products, grew its share of global advertising revenues from 6.1 percent in 2006 to 7.4 percent in 2007. By 2012, Kelsey Group analysts expect the interactive share of global ad spending will reach 21 percent.

"Growing from 7.1 percent to 21 percent is a lot. We're saying that there will be a big shift to digital advertising markets," Matt Booth, SVP interactive local media for Kelsey, told ClickZ News. "The global shift to digital products will be the most interesting and we'll see what kind of global company start-ups will go after that acceleration of dollars moving to digital products."

Directional advertising, which comprises local search, print Yellow Pages and Internet Yellow Pages (IYP), is forecasted to grow from $33.3 billion in 2007 to $41.4 billion globally in 2012, a 4.5 percent compound annual growth rate (CAGR). Local search revenues will grow from $2.1 billion to $6.6 billion (25.5 percent CAGR), IYP revenues will grow from $3.7 billion to $9.2 billion (20.1 percent CAGR), and Print Yellow Pages revenues will decline from US$27.5 billion to $25.6 billion (-1.4 percent CAGR).


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