The Internet Advertising Bureau (IAB) and PricewaterhouseCoopers came out with amazing news about the digital advertising industry recently.
On November 12, they issued a news release headlined: "Internet Advertising Revenues In Q3 '07 Surpass $5.2 Billion, Setting New High." That was followed by the subhead: "Industry Maintains Record-breaking Trend; 2007 Q3 Revenues Up Over 25% From 2006 Q3."
Wow! If that doesn't say it all and validate the hot air we've been blowing all year, I don't know what does. The IAB-PricewaterhouseCoopers report notes revenues for the first nine months of 2007 totaled $15.2 billion, up nearly 26 percent over the $12.1 billion recorded during the first nine months of 2006. Just look at this growth trend:
-- Source: Interactive Advertising Bureau, 2007 --
And an eMarketer report says online advertising will be $21.4 billion in 2007 and grow to $42 billion by 2011, according to Reuters.
The eMarketer report says online ad spend this year will surpass $100 per user and that by 2011, "advertisers are expected to spend nearly double that amount online per user."
According to Reuters, the spending breaks down like this:
What does this mean for us in the online marketing and advertising industry?
It means advertisers and marketers have truly woken up to the power of online advertising and have embraced its high level of measurability and accountability. As Peter Petrusky, director of entertainment, media, and communications practice for PricewaterhouseCoopers, put it, "Internet advertising revenues are on an annual run-rate exceeding $20 billion, further demonstrating the industry has truly come into its own."
Assertions in a William Blair/CIMA study earlier this year are valid as well. That report said growth in search was leveling off (something we're seeing) but growth in online display and especially rich media is taking off. PricewaterhouseCoopers echoed these findings with additional comments from Petrusky: "The emergence of new platforms, including broadband video, rich Internet applications, mobile, and social media promise to deliver new benefits for consumers, and create exciting new venues for marketers to realize value in digital media."
It means that agencies big and small should see a lot more work. Randall Rothenberg, IAB's chief executive, said, "Marketers large and small have come to accept digital media as the fulcrum of any marketing strategy." We're seeing this as well with all clients (even our search-only clients are saying, "OK, what else can we do online?").
Who's getting hurt?
I'd characterize it more as rapid deflation than a bubble burst. Clearly, print's in serious trouble and recent figures validate the gloomiest of industry projections. In fact, visions of the e-media landscape as depicted in "Epic 2014," an eight-minute short on media's "future history," which predicts today's media giants will become afterthoughts, don't seem that improbable.
Call me old-fashioned, but I enjoy my breakfast with the morning paper. As an online marketer who regularly bashes print's ineffectiveness, I worry about the future of local newspapers and the fate of independent, high-integrity investigative reporting. Without getting further into what that means for funding quality local and international content, journalism, and democracy, let's look at the numbers and employment ramifications.
On November 20, Reuters reported that although online spending at newspapers is up, print is way down. According to the Newspaper Association of America:
One cannot avoid the headlines: newspapers around the country are cutting back on staff. Last week, for instance, "USA Today" said it would cut 45 positions, or 8.8 percent of its editorial staff. Be prepared to see more of this.
The future is bright for the Net, and I stand by my theory that even if the economy takes a dive, online will prosper.
As founder and CEO of Overdrive, Harry Gold is the architect and conductor behind the company's ROI-driven programs. His primary mission is to create innovative marketing programs based on real-world success and to ensure the marketing and technology practices that drive those successes are continually institutionalized into the culture and methods of the agency. What excites him is the knowledge that Overdrive's collaborative environment has created a company of online media, SEM, and online behavioral experts who drive success for the clients and companies they serve. Overdrive serves a diverse base of B2B and B2C clients that demand a high level of accountability and ROI from their online programs and campaigns.
Harry started his career in 1995 when he founded online marketing firm Interactive Promotions, serving such clients as Microsoft, "The Financial Times," the Hard Rock Cafe, and the City of Boston. Since then, he has been at the forefront of online branding and channel creation, developing successful Web and search engine-based marketing programs for various agencies and Fortune 500 companies.
Harry is a frequent lecturer on SEM and online media for The New England Direct Marketing Association; Ad Club; the University of Massachusetts, Boston; Harvard University; and Boston University.
June 5, 2013
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June 20, 2013
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