In a new study, entitled “U.S. Internet Advertising 2008-2012 Forecast and Analysis: Defying Economic Crisis”, the research company IDC concluded that the Internet advertising business will continue to grow fast even as the current economic woes will lead to a contraction in ad spending overall, essentially accelerating the transfer of marketing budgets from the traditional media into the new.

IDC forecasted that in the next four years, Internet advertising will grow about eight times as fast as advertising at large and the revenues will double from $25.5 billion in 2007 to $51.1 billion in 2012.

In just five years, the Internet will become the number 2 medium, right behind direct marketing. IDC said that The Internet will surpass newspapers, cable TV and broadcast TV. Video advertising will be the principal disruptor of Internet advertising over the next five years by attracting the most new marketing dollars. Its revenue will grow sevenfold from $0.5 billion in 2007 to $3.8 billion in 2012 at a compound annual growth rate (CAGR) of 49.4%. This growth will take place because brand advertisers will shift significant amounts of money into these video commercials, primarily from broadcast television and to a lesser extent from cable television.

"The size of the online video audience as well as the time it spends watching video is sure to increase as broadband access penetration increases, connections become faster, and as more premium content is available," said Karsten Weide, program director, Digital Media and Entertainment.

Search advertising will remain the one advertising format that will garner the most revenue over the forecast period in the United States. This means that for any media company, search must be a key part of its strategy. Any media company that is not Google cannot ignore this segment even if Google is towering above all others as segment leader with about 70% share of the segment's revenue.