November 12, 2007

IAB: Internet Advertising Continues To Head North

Duncan Riley

12 comments »

New figures released by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers show that internet advertising continues to grow to record levels, with the 3rd quarter internet ad spend in the United States hitting $5.2 billion, a $1.1 billion/ 25.3% increase over the same quarter in 2006.

Whilst the $5.2 billion figure is a record month, the growth rate quarter on quarter are not that spectacular; the third quarter was up only three percent on Q2. This isn’t necessarily a bad thing; three percent may not sound a lot, but if it were 33% the cries of bubble would be heard loud and wide. 3% is a sustainable, healthy number that will bring joy to many online who rely on advertising without the related fear that the growth may not be sustainable.

Internet advertising for the first nine months of 2007 totaled $15.2 billion, up 26% over the $12.1 billion recorded the same period in 2006.

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Ryan Merket

November 12th, 2007 at 6:01 pm

*cringes at the thought of another cliche term to describe this time period*
Jeremiah

November 12th, 2007 at 6:44 pm

This makes sense. Most people including myself have grown up with TV advertising growing more and more bland . We all just tune it out , so for a new medium to become more widely adopted it makes sense now. That being said at some point in the future the same will happen to internet advertising.
Rodrigo

November 12th, 2007 at 6:55 pm

This is a sustainable growth, not a bubble, i hope..
Andrew

November 12th, 2007 at 7:05 pm

I second Rodrigo…
drew

November 12th, 2007 at 7:27 pm

bit off topic but does anyone know what the saturation point for google pay per click is?

(for example lets say i start a pay per click campaign for “online software”, how many clicks could i possibly pay for per day, 5,000 … 10,000 … 50,000 ….

I assume any reasonable person would run out of money before this happens (not everyone has millions to spend on advertising), and I suppose it would be dependent on the search term, but for something fairly popular is there much of a concern?
Daniel Gibbons

November 12th, 2007 at 9:39 pm

@drew: it all depends on the search volume for the keywords you’re using (that is, the number of searches in which your ads could theoretically displayed), and the number of publishers displaying your ads on the content network.

For popular search terms your concern is not going to be running out of clicks, but rather running an efficient campaign where you’re paying a reasonable amount for high quality clicks.
Mike Abundo

November 13th, 2007 at 1:12 am

Why does that chart reach only up to 2006?
Financial Times

November 13th, 2007 at 1:40 am

Publicis warns of web bubble

By Andrew Edgecliffe-Johnson in Monte Carlo
Published: November 12 2007 02:00 | Last updated: November 12 2007 02:00

http://www.ft.com/cms/s/0/47c3.....fd2ac.html

Too many new media companies are chasing too few advertising dollars, one of the advertising industry’s most senior executives has warned, as fresh questions were raised about the fast-rising valuations of prominent online groups.
micfo.com

November 13th, 2007 at 5:43 am

What is current growth rate for Year 2007?
john matthews

November 13th, 2007 at 7:33 am

9. Publicis article…

Perfect example of old media defending its turf.

The key take-away from that article is …
“This year Publicis bought Digitas, a specialist in online advertising, for $1.3bn.”

The old ad agency is and it’s TV planning and buying and so-called marketing mix is scrambling and it’s evident. The TV dollars are simply shifting to digital and it makes sense. The typical “big” marketer allocates roughly 5% of its ad budget to digital while the majority of the balance still goes TV…in other words there is still plenty of money to be shifted into digital. The only “bubble” I would forecast would be the one headed for TV advertising and its new C3 advertising data that will start to be released next quarter by Nielsen.