Online ad sales have become a fairly good barometer of howthe Internet is doing as an industry. In the early days of the Web, it wasconsidered acceptable, if not necessary, to build an Internet-based businesswith the anticipation that advertising and sponsorships would eventually followthe eyeballs onto your Web site. The basic problem was there were many more Web sites than advertising dollarsto support them, and it took only a few years for the bubble to burst.
Things have changed quite a bit in the past 10 years. TheInteractive Advertising Bureau reports that online ad spending reached $12.5billion in 2005, a 30% increase over 2004 levels. The research and consultingfirm, Parks Associates, projects this number will hit $23.5 billion by 2010. TheInternet, as an industry, is now doing quite well.
Companies like Ford, General Motors and Absolut Vodka planto spend 20% of their total advertising budgets online this year. Marketresearch firm eMarketer estimates that $15.6 billion will be spent on onlineadvertising in the US this year. While ad budgets in general are up only 4% onaverage in 2006, marketers are putting money previously allocated tonewspapers, magazines and television in the Internet.
The money is finally following the eyeballs.
If you were to look at how these Internet advertisingdollars are spent, you would find that keyword search advertising represents41% of the market, and display advertising totals 34%. About 46% of the displayadvertising deals are based on cost-per-thousand impressions, and 41% ofInternet advertising deals are still based on cost-per-click orcost-per-transaction.
It can be argued that Web advertising still isn’t gettingthe share of advertising it deserves. However, with better targeting, lowercosts and a much better feel for advertising ROI, the future looks bright.
Dan McKillen is president of the HealthDay News Service
From the June 01, 2006 Issue of MM+M - Medical Marketing and Media
