Forecast: Online ad spending to nearly double by 2014

Spending on online advertising will grow by double-digit percentages over the next four years, ending at close to double its current value by 2014, according to a new forecast by marketing research firm eMarketer.

The research firm estimated online ad spending in the U.S., projected at $25.8 billion for 2010, will grow to $28.5 billion by next year, $32.6 billion by 2012, $36 billion by 2013, and $40.5 billion by 2014. The projections were calculated by performing a meta-analysis of research estimates by firms tracking ad spending.

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The dramatic rise over the next few years, the firm predicts, is due to the fact that even as the economy takes an upward trajectory, big-brand marketers are likely to continue a shift to Internet advertising over older forms, increasingly acknowledging it as the dominant platform for U.S. consumers to spend most of their time and consume content.

Now that the average YouTube viewer is consuming close to 4.5 hours of video every month on the site, Google is finally beginning to reap its dues from its $1.65 billion buyout four years ago. And this aggressive push to increase monetization on the site will lead many more advertisers to join the online video-advertising bandwagon. The format is predicted to remain the fastest-growing of all through 2014.

Meanwhile, search advertising is still leading in terms of actual dollars: As Google’s main source of revenue, ads on Google’s own properties bought in $4.8 billion in the last quarter.

But it’s spending on social networks, the current buzz of the town, which has some catching up to do. Hitting around $2 billion this year, ad spending on social networks still makes for a measly 6 percent of total online ad spending. Marketers may talk about their social media strategy and create Facebook pages and Twitter profiles for their brands, but it seems most of that is yet to be converted into real advertising dollars by its major players.

That may change, largely thanks to Facebook, whose audience of 500 million-plus users is large enough to be attractive to brand advertisers. The company is now ramping up its selling efforts, including rumored plans to lease a large office directly on Madison Avenue to house a growing army of salespeople.