The future of advertising?
With Microsoft buying aQuantive for $6 billion, Google acquiring DoubleClick for $3.1 billion, Yahoo purchasing the 80% of Right Media it doesn’t already own for $680 million, and Ad firm WPP getting 24/7 Real Media for $649 million, the online advertisng market deserves a relook at the number.
The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) reported online advertising revenue was up 35% in 2006 to a record $16.9 billion. In 1999, the IAB and PwC reported Internet advertising revenue of $4.6 billion, a total just shy of revenues in only the fourth quarter of 2006.
While Internet advertising is growing at a rapid clip, it is still dwarfed by other forms of advertising. According to TNS Media Intelligence, spending on television advertising for 2006 was $65.4 billion. Newspapers, magazines and radio garnered 2006 advertising spending of $27.9 billion, $29.8 billion and $11 billion, respectively.
Based on the IAB’s figures, Internet advertising surpasses only radio thus far. Those figures are part of the reason that Google is dabbling with selling ads for traditional media such as radio and print as well as its traditional search advertising.
Within the online category, advertising based on search keywords — Google’s specialty — represented 40% of the 2006 revenues. Display advertising — banner ads, sponsorships and video — accounted for 32% of the total, according to the IAB.
One reason for the phenomenal growth is the accountability that online advertising offers its clients, and the race is on to present the highest degree of transparency and quantifiable results.
Does this shift also represent a move of advertising from being an art form dealing with emotional appeal to being more of a science - take the case of Google AdWords or even Spot Runner, which automates the production of a video commercial?
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Filed under: Digital culture, Statistics, Trends