A new study from advertising trend analyzing firm, Magna estimates that Internet Advertising may overtake Newspaper Advertising by the middle of the decade and assume position as the second largest advertising medium.

While the overall advertising market that includes TV, print and online has declined last year, the trends this year show a positive trajectory with new types of internet advertising being observed.

The Internet Advertising Bureau (IAB) reported a total of $22.7 billion in revenues for US online advertising revenues for the year, 3.4% down from the 2008 figure. The UK arm of the IAB reported a slight 4.2% increase in online advertising spend in the UK, to £3.54 billion ($5.4 billion).

One reason for this increase is the strength of display advertising, now accounting for 20% of revenues. Whilst search revenues declined from 2008 to 2009, display revenues grew, up from $637.4 million in 2008 to £709 million, although these are not exact like-for-like figures. Display advertising mainly consists of banner advertising or logos displayed on another Website and hyper-linked to the advertiser’s site.

A key driver in the rise of display advertising is the growth of social networking sites.

For example, Facebook reports more than 400 million active users (up from 150 million at the start of 2009), with over 50% of them logging in at least once per day. According to the company, an average user spends 55 minutes per day on the site. That represents a lot of screen time for a large number of people, and it also represents a lot of people in Europe and the US. These people are attractive to brand advertisers who buy display ads.

‘‘Although many online games are free to start playing, players can upgrade to a higher level or invest in virtual goods that provide an enhanced gaming experience. This generates income, and game developers are therefore willing to advertise to get people playing their game – and spending money’’ said John Bosnell, Senior Analyst at Point Topic.