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Think gas prices are getting expensive? Online advertising prices could be rising too, thanks to increasing demand for online ad vehicles, which could surpass supply in the short term. This prediction comes from research conducted by McKinsey & Company and profiled in The McKinsey Quarterly (2006 Number 3) article, “A reality check for online advertising” (free registration).

According to the McKinsey researchers, even though online advertising is getting tons of attention from marketers now, supply bottlenecks, particularly in video ads that precede online ad content, could limit the pace of online ad growth.

Additionally, a shortage of ad agencies that can manage both traditional and online campaigns could slow growth in spending to online ads, since clients may have to employ and coordinate the work of multiple agencies.

However, the researchers predict that over time, inventory levels will increase, enabling a larger shift in budgets to online. 

They also foresee that consumers will spend more time watching video on computers and mobile devices.

This, according to the McKinsey researchers, should give marketers and the media incentive to “innovate and increase supply, which, along with better measurement technologies, will allow marketers to shift more of their budgets online.”

According to the researchers, this transition to online will require not only new marketing and management skills, but also a “detailed understanding of the marginal economics of products, customers, and customer conversion.”