Will verticals emerge as the key driver of online advertising in the near future? Most definitely, according to a new report by the Kelsey Group. Make that 2012, to be specific.

In recent years, search, banners, e-mail and lead generation have been responsible for the explosive growth in interactive advertising, but that is soon about to change, with vertical advertising taking the lead. Here is what the Kelsey report stated:

While online advertising has been propelled primarily by search, banners, e-mail and lead generation, The Kelsey Group expects verticals to emerge as a key driver of online advertising by 2012. Based on trend analysis, the firm forecasts the U.S. interactive classified and vertical share of online advertising will grow from 18 percent in 2007 to 24 percent by 2012. Revenues for interactive classifieds and verticals will grow from US$3.9 billion to US$14.7 billion during the same forecast period, representing a 30.5 percent compound annual growth rate (CAGR).

During the forecast period, U.S. online classifieds will grow from US$3.9 billion to US$9.1 billion (18.6 percent CAGR) and online verticals (such as home services, home and garden, health care, legal and auto repair) will grow from US$100 million to US$5.6 billion (461.4 percent CAGR).

Kelsey based its results on trend analysis, and stated the vertical share of interactive advertising will grow from 18% in 2007 to 24% in 2012. Revenues for interactive classifieds and verticals will mushroom from $3.9 billion to about $14.7 billion in the same period, representing a 30.5% compound annual growth rate.

Kelsey based its results on trend analysis, and stated the vertical share of interactive advertising will grow from 18% in 2007 to 24% in 2012. Revenues for interactive classifieds and verticals will mushroom from $3.9 billion to about $14.7 billion in the same period, representing a 30.5% compound annual growth rate. According to Kelsey Group Program Director Peter Krasilovsky (who was also the cochair of the Drilling Down on Local 08 conference): Vertical businesses are harnessing the network effects of the Internet, much like Expedia and others did for travel in the late 1990s. We’re seeing an accelerated effect from fragmentation, which will draw ad revenue from traditional media toward online vertically targeted solutions. Kelsey based its results on trend analysis, and stated the vertical share of interactive advertising will grow from 18% in 2007 to 24% in 2012. Revenues for interactive classifieds and verticals will mushroom from $3.9 billion to about $14.7 billion in the same period, representing a 30.5% compound annual growth rate.According to Kelsey Group Program Director Peter Krasilovsky (who was also the cochair of the Drilling Down on Local 08 conference): Vertical businesses are harnessing the network effects of the Internet, much like Expedia and others did for travel in the late 1990s. We’re seeing an accelerated effect from fragmentation, which will draw ad revenue from traditional media toward online vertically targeted solutions.

Kelsey based its results on trend analysis, and stated the vertical share of interactive advertising will grow from 18% in 2007 to 24% in 2012. Revenues for interactive classifieds and verticals will mushroom from $3.9 billion to about $14.7 billion in the same period, representing a 30.5% compound annual growth rate.According to Kelsey Group Program Director Peter Krasilovsky (who was also the cochair of the Drilling Down on Local 08 conference): Vertical businesses are harnessing the network effects of the Internet, much like Expedia and others did for travel in the late 1990s. We’re seeing an accelerated effect from fragmentation, which will draw ad revenue from traditional media toward online vertically targeted solutions.

Kelsey based its results on trend analysis, and stated the vertical share of interactive advertising will grow from 18% in 2007 to 24% in 2012. Revenues for interactive classifieds and verticals will mushroom from $3.9 billion to about $14.7 billion in the same period, representing a 30.5% compound annual growth rate.According to Kelsey Group Program Director Peter Krasilovsky (who was also the cochair of the Drilling Down on Local 08 conference): Vertical businesses are harnessing the network effects of the Internet, much like Expedia and others did for travel in the late 1990s. We’re seeing an accelerated effect from fragmentation, which will draw ad revenue from traditional media toward online vertically targeted solutions.