eMarketer looks at trends in online computer hardware and software advertising.

In 2004 and 2005 "computing products" was the second largest category in spending on online advertising, according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC). The computing products category covers both consumer and enterprise IT products, specifically PC hardware, prepackaged software, local area network systems and network systems integration, computer processing and data preparation, and data processing services.

This year, eMarketer projects online ad spending for computing products will grow by 21 percent in 2006, to reach $2.3 billion, up from $1.9 billion in 2005. This is the same as our 21 percent growth forecast for all of online advertising. Computing products advertising, as a share of total online advertising spending, has been dropping since 2003, from 20 percent of all online advertising that year to 15 percent in 2005. eMarketer expects the category to account for about 15 percent of all online advertising again in 2006, and about 16 percent in 2007, when spending in the category is projected to total $2.8 billion. So the shrinkage relative to online advertising as a whole will cease, but a boom in spending is not imminent.

Sales of PCs are expected to grow about eight percent annually through 2009, according to Gartner, but pricing pressures will keep revenues and advertising budgets flat on the hardware side. Despite Dell's impressive growth in earnings (52 percent) and sales (13 percent) in the last quarter of 2005, executives announced sales growth of less than nine percent for the following quarter. The software side will lead much of the advertising spending growth. This year, Microsoft will promote its new "Live" web services, Windows Live and Office Live, as well as its Windows OneCare security product. In the fourth quarter, Symantec will roll out its first subscription-based security product, and rivals Trend Micro and McAfee are readying new automated services and improvements, according to The Wall Street Journal.

These significant moves will have a positive impact on advertising spend in the sector. However, the variance between different providers is enormous and means that computing products as a whole will just keep pace with overall trends in spend on online advertising

A review of online advertising spending figures from 2001 to 2004, as published by Advertising Age in its annual "Leading National Advertisers" report, shows that three of the top four computer/software advertisers raised their online advertising by significant percentages from 2001 to 2004: Dell by 230 percent; Hewlett-Packard by 218 percent and Microsoft by 17 percent. Only IBM saw a drop, by 62 percent.

Lisa Phillips is a senior analyst at eMarketer. This article was drawn from eMarketer's recent report, Technology Marketing: Customer Driven Convergence. eMarketer is the "first place to look" for market research information related to the internet, ebusiness, and online marketing. To email eMarketer, click here.