US spending on internet advertising will hit £16 billion sterling by 2005, according to new research.
A report by eMarketersays internet advertising will rise 7 per cent this year to £5.2 billion, compared with £4.9 billion last year even amid a slump in the online sector.
Online advertising expenditures will grow faster in the coming years, the report adds.
EMarketeranalyst Mr Jonathan Jackson said: "The bloom may be off the internet advertising rose, but we are now entering a period of reality rather than hype.
"Surely no one could seriously expect the explosive growth of online advertising to continue unabated. The good news is that marketers are responding to the economic challenges with new techniques and strategies, along with research data to prove their effectiveness."
The firm said various other reports have projected online ad spending for 2001 to be anywhere from £3.2 billion to £8.7 billion.
The report noted that costs for online ads continue to decline and that three-quarters of web advertising space goes unsold.
It said more than 99.7 per cent of online banner ads are not clicked on, but researchers are working to improve the response rate.
PA