A new study from Outsell Inc. has concluded that advertisers will spend 18% more on online advertising in 2007. Although click-fraud concerns will see PPC expenditures suffer a 1% decline, moreover, cost-per-action ads will grow by 12%. However, search engine ads promise to grow by a whopping 39%.

Of course, although print advertising will still represent the largest chunk of the advertising market, it will continue to lose to online media. As the study notes:

• Print, while still the largest recipient of ad dollars (40 percent), will continue to lose share as online’s share grows to 20 percent. This is a major milestone for online advertising.
• Advertisers’ share of online spending for pay-per-click (PPC) ads will fall one percent in 2007, while cost-per-action ads’ share will grow eight percent and online sponsorships’ share will rise 12 percent.
• Click fraud concerns are a driver in PPC’s drop in share. Forty-nine percent of advertisers have reduced or plan to reduce their PPC spending because of click fraud, up from 37 percent when Outsell first surveyed advertisers on this issue in the Spring of 2006. Advertisers also rate their own Web sites and e-mail marketing more effective than search engine ads, additional drivers in PPC’s slowdown.
• Advertisers rate online advertising very effective for branding, contrary to common wisdom that online shines at leads but is weak for branding.
• The share of TV/radio/movie ad spending will decline about 3.5 percent this year.
• This is the first study to reveal that advertisers are redirecting more trade magazine ad dollars to events than they are moving to paid search.

Via Marketing Pilgrim.