Jun
19
Jupiter Predicts $35 Billion Online Ad Spend…and what of Digital Signage?
Filed Under Advertising, Digital Signage
IMHO this needs to be taken with a bit of a grain of salt. Back in the dot com heyday, Jupiter used to tout some research stats about markets and industry that – to put it mildly – involved a lot of hubris.
In other words, their statements have always been…bold.
There’s brief note on Mediapost
about a research report that predicts online spending will grow to 35 Billion from this year’s 19.9 Billion.
That’s a significant CAGR but it is within the realm of possibility, given the current upswing in that space.
I find this quite interesting for Digital Signage only in that, as I stated from this other study there’s a good chance that retail media advertising could be at the same level in the same time period (actually the author predicts double Internet Ad Sales in 2 years but I think it’s a tad aggressive)
Current ad forecasts/estimates for Digital Signage that I’ve seen range from 2-4 Billion by 2011/2012, which I’ve stated for a while I think are low, but you’ve got to under-promise if you’re a research company, right?
My educated guess would put the number closer to 16-17 Billion as a market size, if truth be told
By 2012 there’s supposed to be over 2.5 million sites (10 million screens) with Digital Signage advertising capability. At 4 Billion in revenue, that would be $1600 per screen/year….it just doesn’t make sense. Even at 1,000,000 sites to cut the estimate in half, that’s $3200/year – still doesn’t even pay for the installation. At 16 Billion in ad revenue with 1 million sites, you’re now looking at $16,000/location …starting to sound better
To look at it another way, if there’s an average of 6 ad spots per “location” at $500/month (cheap) and only 50% of them got filled, the resulting annual ad spend would be (1,000,000 locations x 3 spots x 500 x 12) = 18,000,000,000.
Now there’s a feel good number. 
So basically we’d be half of the Online ad revenue if we sold 50% of the available space on these ad networks. At Today’s Ad Prices. If we cut that again in half as a revenue number (so assume there’s only 500,000 locations with advertising capability or assume on 1.5 spots per location get sold ), that’s still close to 9 Billion.
The numbers start adding up pretty quick.
- 2500 Wal-Marts
- 34,000 Grocery Stores
- 144,000 Convenience Store Chains
- 30,000 Elevators
- 90,000 Gas Stations
- 30,000 Health Clubs
- etc
Again…more random musings on the potential size and direction of our industry. The above is conjecture but I’d love to get your take on the above. Is it over the top to assume this space could grow that fast? If P&G just re-routed $2Billion into the retail space, we’re starting to add up the numbers….
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[...] This report comes out at the same time as another study by the same company is predicting that Online Media spend alone will be the US’s largest ad spend category jumping to $61.98 Billion by 2011. This is almost DOUBLE the forecast that I reported on earlier of $35 Billion. [...]