U.S. advertising spend will grow 5.8 percent in 2007, with online advertising spend growing 18 percent - faster than for any other major medium - market research and advisory company Outsell forecasts in its just-released second annual report on ad spending.

Advertisers also plan to increase search engine advertising spend 39 percent - the most of any major online method - according to Outsell. Print, still the largest recipient of ad dollars (40 percent), will continue to lose share as online increases its share to 20 percent - a milestone for online advertising. Advertisers also rate online advertising very effective for branding, contrary to common perception.

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, Outsell forecast.

Some 49 percent of advertisers have reduced or plan to reduce their PPC spending because of click fraud, up from 37 percent in spring 2006. Advertisers also rate their own websites and email marketing more effective than search engine ads - also accounting, in part, for PPC's slowdown.

This study also revealed that advertisers are redirecting more trade magazine ad dollars to events than they are moving to paid search.

The share of TV/radio/movie ad spending will decline about 3.5 percent in 2007.

Outsell fielded a web-based survey of 1,010 advertisers and looked at five media types: online, print, events, TV/radio/movies, and other.