Online Ad Spending Up 18 Percent In 2007
In early 2007, an industry survey found that marketers planned to grow their online advertising budgets by 18 percent that year, faster than any other major media type. Here is what that forecast actually said, and how it compared to what the year eventually delivered.
In early 2007, Outsell Inc. released its second annual ad spending study, based on a survey of over 1,000 advertisers representing 6.5 billion dollars in ad spending. The survey found that companies planned to increase their online spending by 18 percent that year, faster growth than any other major media type. By year end, actual results from separate measurement firms landed close to that number. Nielsen Monitor Plus measured 18.9 percent growth for the year, while the IAB and PricewaterhouseCoopers, using a different methodology, reported a larger 26 percent jump in total internet ad revenue.
What the Original Survey Said
In early 2007, research firm Outsell Inc. released its second annual report on advertiser spending plans, as covered by ClickZ. The study, based on a web survey of over 1,000 advertisers representing about 6.5 billion dollars in combined ad spending, found that companies planned to increase their online spending by 18 percent that year, outpacing every other major media type. The same study projected that online advertising would reach 20 percent of total U.S. ad spending by the end of 2007.
The forecast also broke down expectations within the online category itself. Advertisers surveyed expected to pull back slightly on pay per click spending, citing concerns about click fraud, while cost per action spending was expected to rise by about 8 percent and online sponsorships by about 12 percent.
The Full Picture, In Context
Three different organizations measured online ad spending around this period, using different methods and covering slightly different things. Here is how each one reported it.
Why Advertisers Were Shifting Online
Traditional media was flat or declining
Nielsen's full year data showed newspaper spending falling sharply in 2007, while most traditional categories grew only modestly, if at all.
Search and video were expanding fast
Search advertising continued growing as a share of the online pie, and video, broken out separately for the first time in some reports, was the fastest growing individual format.
Consumer categories led the charge
Consumer focused advertisers accounted for the largest and growing share of online ad revenue, rising from about half to well over half of the total between 2006 and 2007.
Measurability was improving
Advertisers increasingly cited better measurement and targeting as reasons online spending felt lower risk than traditional channels.
Why This Forecast Mattered
By 2007, online advertising was no longer a small test line item for most large advertisers. The scale of the shift described in these reports, with total U.S. ad spending nearly flat while online spending grew by double digits, showed that budget was moving from one channel to another, not just growing everywhere at once. That kind of reallocation tends to matter more to an industry than growth alone, since it reflects a genuine change in where advertisers believed their money worked hardest.
Who This Is Relevant To
This history is useful for
- Marketers and affiliates curious about how online advertising became a mainstream budget category
- Anyone researching the early history of digital ad spending trends
- Content creators covering the evolution of advertiser budget allocation
- Marketers evaluating how quickly channel shifts can happen once they start
What to keep in perspective
- This is a historical snapshot from 2007, not a description of current ad spending
- Figures here come from three separate, differently scoped reports, not one single dataset
- Digital advertising's scale and structure have changed enormously since this period
What Marketers Can Still Learn
Four lessons that still apply today
- Watch relative growth, not just absolute numbers. Online spending mattered less because of its raw size in 2007 and more because it was growing so much faster than everything else, a pattern worth watching in any channel today.
- Forecasts and actuals rarely match exactly, and that is normal. Outsell's 18 percent forecast, Nielsen's 18.9 percent actual result, and the IAB and PwC's 26 percent revenue growth all describe the same broad trend through different lenses. No single number tells the whole story.
- Flat overall spending can still mean major internal shifts. Total U.S. ad spending barely moved in 2007, yet entire channels were being reshaped underneath that flat top line number.
- Improved measurement drives budget confidence. Advertisers in 2007 explicitly cited better measurability as a reason for shifting budget online, a reminder that clear reporting remains one of the strongest arguments for any channel.
Perspective and Considerations
Why this history is still worth knowing
- It marks a period when online advertising clearly became a mainstream, budget defining channel
- It is a useful case study in how forecasts, survey data and measured results can differ while describing the same trend
- It offers context for understanding how today's digital ad spending scale came to be
Considerations
- Figures here reflect 2007 reporting, not current ad spending levels
- Each source used a different methodology and scope, so treat them as complementary, not identical
- Digital advertising formats and measurement have changed substantially since this period
Put Ad Spending History Into Practice
Understanding how advertiser budgets have shifted over time can help you evaluate where to test traffic next. Review your program's permitted traffic sources in your MarketHealth affiliate dashboard before launching a new campaign.
Join MarketHealthFrequently Asked Questions
Where does the 18 percent figure actually come from?
Is 18 percent what actually happened by the end of 2007?
Why do the different reports show different numbers?
Does this reflect current online ad spending?
Why does this history matter for marketers today?
A Note on This Article
This article is a historical retrospective built around a real, publicly documented 2007 advertiser survey from Outsell Inc., alongside separate, actual year end figures from Nielsen Monitor Plus and the IAB and PricewaterhouseCoopers Internet Advertising Revenue Report. Each figure reflects its own source's specific methodology and scope, and none should be treated as a description of current online ad spending.