Posts Tagged ‘IAB’

Q3 2007 Internet advertising numbers

Monday, November 12th, 2007

This is an update to the Q2 statistics on Internet advertising that I posted awhile back. Today the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers released the Internet advertising numbers for the third quarer. According to the release:

“Internet advertising revenues exceeded $5.2 billion for the third quarter of 2007…a $1.1 billion increase, or 25.3%, over Q3 2006. The results…are nearly 3% higher than Q2 2007, itself the last record-setting quarter. Revenues for the first nine months of 2007 totaled $15.2 billion, up nearly 26% over the $12.1 billion recorded during the first nine months of 2006.”

A summary of Internet advertising statistics

Friday, October 12th, 2007


statisticsThis week while writing about Internet advertising I came across quite a few statistics – it seems like many of the market research firms may have been timing the release of their data to coincide with the Association of National Advertisers (ANA) Annual Conference being held in Arizona. Here’s a roundup and links to the highlights:

IAB Internet Advertising Revenue Report: Internet advertising revenues in the U.S. totaled nearly $10 billion for the first six months of 2007, with Q1 accounting for approximately $4.9 billion and Q2 totaling approximately $5.1 billion; Internet advertising revenues for the first six months of 2007 increased 26.4% from the same period in 2006; Search revenue accounted for 40% of 2007 second-quarter revenues; 2007 revenues for Internet advertising estimated to hit $20-21 billion.

Marketing & Media Ecosystem 2010 study by ANA & Booz Allen Hamilton: 90% percent of marketers plan to increase their digital marketing spending by 2010; only 24% of the 250 survey respondents think their organizations are digitally savvy; barriers to making bigger digital investments are insufficient metrics (62%), lack of organization support (51%) and lack of experience in new media (59%).

Forrester Research’s U.S. Interactive Marketing Forecast 2007-2012: marketing spend will grow to $61 billion by 2012, an increase driven by marketers who will leverage a distribution of channels rather than pour new spends into a single place; Interactive marketing will top $61 billion By 2012; Search marketing will triple in five years; Social media will drive emerging channels to $10.6 billion by 2012.

eMarketer: Online advertising will hit $21.7 billion in 2007, surpassing radio for the first time ever; $44 billion for Internet advertising by 2011.

Data Centre of China Internet: China’s internet advertising sector is expected to increase by 53.07% in 2007.

And this isn’t a statistic, but Steve Ballmer, president of Microsoft had this to say at the ANA Conference, as reported by CNET: “In world search and advertising, Google is the leader; we’re an aspirant. We have a lot of work to do in search and advertising.”

~ Stairs & Railing ~

What's next for Internet advertising

Thursday, October 11th, 2007

Look into the futureGoogle revolutionized Internet advertising in 2000 when it launched AdWords and the pay-per-click (PPC) model. This program was ground-breaking not just because the small text ads that ran alongside Google search results were served up based on relevance, but also because, for the first time, marketers paid only for an action (a click on their ad) – they didn’t have to pay for the thousands of impressions that were not clicked. With AdWords, performance-based media was born.  

Once advertisers demonstrated that they were willing to pay for any click, it was a short leap to believe that they would be willing to pay even more to know exactly who it was that was clicking. Today, lead generation and pay-per-conversion models (Google calls this cost-per-action) have joined PPC as viable business models, providing even more information to marketers who are trying to reach their customers.

 

Lead generation and cost-per-action pricing models are already popular in the B2B world. In the IT market, for example, Web Buyer’s Guide, KnowledgeStorm and Bitpipe are providing lead generation services to the biggest technology companies, which pay anywhere from $20 to $120 per lead to reach the specific individuals that they think are most likely to buy their products.

The Internet advertising market is going to continuing to move from static advertising to performance-based media. According to the just-released IAB Internet Advertising Revenue Report, approximately 50% of 2007 second-quarter revenues were priced on a performance basis, up from 47% reported for the second quarter of 2006. Lead generation revenues accounted for 8% of the 2007 second-quarter revenues or $408 million, up from the 7% ($284 million) reported in the second quarter of 2006. Contrast those statistics with the fact that approximately 46% of 2007 second-quarter revenues were priced on a CPM or impression basis, down from 48% for the same period in 2006.

Performance-based media is the future. We have already seen the movement with traditional Web content. Blog content, podcasts and video are all moving toward incorporating PPC pricing models, as well. I think the next move for these newer content formats is lead generation and cost-per-action. Let’s take video as an example. Silicon Alley has a write up about how advertisers are starting to take video more seriously, but that CPMs are declining. There is a debate going on around how money is going to be made on video advertising – what kind of ads will be used, the length, the format, etc. Applying the move toward performance-based media, I believe that someone is going to develop a lead generation engine around online video that will provide advertisers not only with the information on what videos were watched and how many times, but by whom and what their demographics are. Web Buyer’s Guide has a product on the market that does this, and I think it’s just a matter of time until one of the major video providers offers this type of advertising package.

And looking even further down the road – what’s the next wave of performance-based media? Right now companies pay for leads, but what if in the future companies begin to pay only for customer acquisition, and after an individual makes a purchase the lead provider gets a percentage. A large percentage. Sound like the affiliate programs that are widespread in the consumer market? Sort-of. But what happens when the technology is developed for a video provider to track an individual from the first video that they watch that peaks their interest in a product, all the way to the buy, and the video provider gets a portion of the sale?

Now that’s performance-based media worth talking about.

Disclosure: I used to work for Web Buyer’s Guide.

 

~ Foggy Autumn ~ 

How to become an Internet advertiser for $5.05 (but why you should spend more!)

Tuesday, October 9th, 2007


Google AdWordsThanks to Google AdWords, it is possible to become an Internet advertiser for the incredibly low cost of $5.05 – provided you have a Web site, that is. All you have to do is to sign up for a Google AdWords account 
(there is an initial registration fee of $5.00). After you select your keywords, set the minimum spend per click to $0.05. You’ll serve your first ad – and get your first click – for a grand total of $5.05. Voila! You’re an Internet advertiser.

Of course, I’m simplifying things.

 You could technically be an Internet advertiser for that cost, but the real benefits of pay-per-click (PPC) advertising come with scale and conversion. If the # of clicks x cost-per-click = less than $ earned from conversion – you’re laughing all the way to the bank. In non-math terms, the more individuals you can get to click on your ad, at the lowest cost per click, who you then convert into customers… the more money you’re making.

The recently released IAB Internet Advertising Revenue Report analyzes the Internet advertising market for the first six months of 2007 and shows that approximately 50% of second-quarter revenues were priced on a performance basis, up from 47% reported for the second quarter of 2006. Companies are increasing spend on PPC (and other forms of performance-based) advertising programs because they are measurable.

So, while Google AdWords (and its PPC sibling Yahoo Search Marketing) are a low-cost way to enter the Internet advertising market, the companies that are making a serious impact – and significant profits – from PPC advertising are those that are willing to scale and that are able to convert their visitors to customers.

(By the way, if you are looking for a play-by-play of how to set up a Google AdWords account, there is a good post at the Tech Savvy Marketer.)

~ Red Burst ~ 

Growth is the reason that the Internet is slowly killing print

Monday, October 8th, 2007

Internet advertising for the first half of 2007 hit $10 billion – up 27% from the same period last year, according to a recent Internet Advertising Revenue Report released by the IAB.

 Even though the various types of Internet advertising still make up only a small percentage of the overall ad industry (about 9.5%), the growth of Internet advertising is predicted to be 85% between 2006 and 2009. 85%!!! That is a huge amount of growth.

And growth is the reason that online advertising is having such a negative impact on print. Business is always moving toward areas of growth and away from stagnant, declining markets. You can see this trend clearly if you look at IT and business magazines. Print publications in this market are shutting their doors. Business 2.0 just closed. InfoWorld announced earlier this year that it would move to online-only, saying, “Frankly, the editorial staff foresaw the demise of print from a long way off and began making preparations for that inevitable day.” 

Things are shifting and the print world is going to have to adjust, the faster the better.

 

~ Today’s view: http://www.flickr.com/photos/13799608@N08/1517785063/