Sep 02, 08(a) "The Decade in Online Advertising," published in 2005 by Internet ad firm DoubleClick, provides some perspective on the duality of Internet advertising. On the one hand the growth has been enormous; on the other hand, it still amounts to only a small fraction of U.S. ad expenditures.
To read the news these days you could easily get the idea that the Internet dominates all advertising. The reality is far different.
(b) The IAB Internet Advertising Revenue Report is an industry survey conducted by PricewaterhouseCoopers and sponsored by the Interactive Advertising Bureau (IAB). Published semi-annually, the latest version was published in October, 2007.
(c) A View to the Future
eMarketer.com is focused more-or-less exclusively on sales reports and sales projections, and so of course is willing to go out on a limb with its projections of Internet advertising spend.
Things do clip along for the next few years, merely doubling by 2009. But unless all other forms of advertising remain static in volume during that period, Internet advertising will still only represent about 13% of all U.S. advertising expenditures by 2011.
I write this not to be negative. The numbers are remarkable. But we have to keep in mind that the Internet, while heavily influencing the show, is not yet running it.
2. We've Officially Acquired DoubleClick
Read Google CEO Eric Schmidt's blog entry the day Google announced that it had successfully completed the acquisition of DoubleClick (for a mere $3.1 billion). A limited amount of insight is offered beyond the theme that "ultimately, we believe that by combining our advertising network with DoubleClick's display ad serving products, and by investing resources in the display ad business, we will be able to help publishers and advertisers generate more revenue." Schmidt follows that statement with what I would label a questionable syllogism: "That in turn will fuel the creation of even more rich and diverse content for Internet users everywhere." Hmm...
3. How Auctions Set Ad Prices
They say that Google has no trouble attracting the best and the brightest, and I see they've hooked Hal Varian." Mr. Varian is a very well-respected professor in the School of Information, the Haas School of Business, and the Department of Economics at the University of California at Berkeley, who is "currently on leave from Berkeley and...serving as Chief Economist at Google." He is the author of numerous articles and scholarly papers and one of the key authors of the famous study, "How Much Information? (which I reference in my section on the Information Explosion).
This blog entry from Mr. Varian provides a straightforward explanation of the somewhat complex procedure of how advertising is priced at Google and several other search engines.
4. Jack Myers Media Spending 2006-2009 Estimates
As I mention in the main article, Jack Myers, "for more than 25-years...a media industry thought leader and acknowledged visionary," takes a contrary view of the more widely-acknowledged guru of ad spending forecasts, Robert J. Coen. And he puts his insights where his mouth is in his own forecast of ad spending through 2009, and offers it without charge. I haven't compared all the figures in detail, but my sense is that Myers is much closer to the target than Coen and the host of other prognosticators that have flourished with their predictions and analyses.