Investors flock to online advertising market - Puget Sound Business Journal (Seattle):

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Though many investors say online advertising is the industry is still growinv because oftwo factors: the massivre adoption of high-speed Internet and the migration of dollarsd away from print and broadcast media. "Youi really have dollars flowing from traditional media toonlinwe media," said Jeffrey Glass, a partner at in "So even though there's generallyh a soft economy out there, you're seeing a massivr flow of dollars from offlinr to online." Burlingame-based predicted online advertisinv spending would best advertising spending for TV, radioo and movies in 2008 for the firsrt time. Companies are projected to spened $108 billion online and $98.
5 billionm on TV, radio and movie ads. Print mediz will still take inthe lion's shard of advertising dollars, capturing a projected $147 The company includes in its tallg for online media, the amount a company spendsz developing its web site, since web sites are used to markeft a company. Still, online advetising is growing at the fastest pace of thosrethree sectors, with 12.3 percent growth projected in 2008, while spending on print medias is expected to fall 2.4 percent. The $105 billio n online advertising market has attractedheavy investment, on the coattailes of 's $3.1 billion acquisition of in April 2007.
Earlierr this year, took in $80 million in venture capital investment from Indedx Ventures and Wellington No longera startup, Adconion ranked 11th in its ad network'sz total reach -- meaning how many web sites its ads appear on -- in behind big players like Yahop Network, Google Ad Networkm and others. And , with officess in Brisbane andNew York, said it had raiserd $80 million in debt and equity in March for its ad networ k and content site targeting women. 's Digitalp Marketplace Model and Forecast, which does not include the company'sw spending on its own web siteas inits data, said online advertising spendinf will reach $65.
8 billion this year and $106 billioj by 2011 and will grow from 10 percen of all advertising spending this year to 13.6 percentr by 2011. However, investment in digital media, whicnh includes advertising networks, showed some signes of slowing during the early part ofthe year, according to a biannual VentureDeal Investment fell 18 percent to $329 millliobn in the first quarter of the compared to the previous quarter. Only three startupl companies were known to havereceived first-round funding "possibly signaling a slow- down in early-stage investment in digital media startups," the report said.
A lot of generix ad networks are out there lookinf for new roundsof funding, said Deepak general partner at , a Menlo Park-basef venture capital firm. But in this said Kamra, it's getting tougher to raise them. "Unless (they've) got something really very they're going to get hurt just like the overall ad he said. Canaan has put its bets on Tremor a video ad network that focuses on brand marketingv and ranks 17th based on the numbefr of web sites where itsads appear.
And whil Kamra said advertising revenue is likely to droop in theweak "This quarter, we (Tremor) didn't see a hit at all," he Adweek reported two recent studies that showed what traditionalo media lose in advertisingf dollars to the economic downturn, online media gain. The obvious reason: online advertising is cheaper. Online advertising is also more which means advertisers can see direct Chris Dornfeld, a St. Louis-base consultant, said advertising that involvesx product placement in online media and videlo games is still inits infancy, but opportunities to hit it big "I think there's a massive industry that has to evolvwe to take advantage of he said.
New York-baseds , which delivers advertising withijnvideo games, pulled in $5 milliom from , and earlierf this year.