Online ad revenue growth exploding
I don’t write much about web growth anymore. I even gave up on web advertising growth stories a couple of years ago, because it seemed kind of foolish to keep saying the same thing. Anybody even remotely interested in the Web could tell that everything about it was moving northward (still is).
But the Borrell report below and a new study from market research firm IDC are too much to resist. According to the IDC report, overall Internet advertising revenue in the U.S. will double from $25.5 billion in 2007 to $51.1 billion in 2012. That’s right: double! Borrell reveals that local online revenues are growing “at a phenomenal rate of 50 percent this year” and that double digit growth will continue for at least another 18 months. His prediction that 2008 will be a $13.1 billion year for local online spending is in line with the IDC numbers.
A little context is in order. Television advertising in the U.S. is a $70 billion industry. While there have been a lot of doomsday predictions about broadcast revenues, I think that number is going to be around for awhile. But at $51.1 billion in 2012, web advertising revenue will be pushing TV. IDG actually predicts that by 2012, internet advertising will displace TV and be second behind only direct marketing.
Think about that for a minute.
Meanwhile, the report offers promise for those who already live in the world of video (can you say TV?):
Video advertising will be the principal disruptor of Internet advertising over the next five years by attracting the most new marketing dollars. Its revenue will grow sevenfold from $0.5 billion in 2007 to $3.8 billion in 2012 at a compound annual growth rate (CAGR) of 49.4%. This growth will take place because brand advertisers will shift significant amounts of money into these video commercials, primarily from broadcast television and to a lesser extent from cable television.
And these kinds of predictions are always based on current models. What happens if the Web finally figures out how to advertise for real? It is a very long time (in web years) between now and 2012.
The point is the Web is where it’s at, and the size of those numbers mean disruptions will continue to relentlessly pound the status quo, even if that status quo was only created yesterday. We’re in an incredible season of change, and nobody really knows how its all going to play out, if it ever really does.
But you already knew that, right?
