INDUSTRY STATISTICS & DATA by eMarketer
eMarketer aggregates and analyzes data from over 1,700 global research sources covering every aspect of the Internet, e-business and online marketing. The following is an excerpt from The Ramsey Review subscription, written by CEO and co-founder Geoff Ramsey for e-business executives.
The State of the Online Advertising Industry, November 2004
You had to be living in a cave for the past six months to not realize that the Internet is back. The mood is “frothy.” If you recall the wild and woolly days of the pre-bust Internet frenzy, which was quickly followed by the implosion of all things Internet, you might feel like we’re headed down the same dark path. But that’s not the case. Unlike before, the fundamentals are there. Internet companies, big and small, have real revenue. Traditional firms that are selling on the Net are making money, too. A recent Shop.org and Forrester Research study that showed that 79% of online retailers are profitable now, with the average margin at a respectable 21%. I was struck by a quip from LandsEnd.com CFO, Don Hughes, who said, “Customers are driving us to online channel. It’s already more profitable than our catalogs.”
eMarketer forecasts a 28.8% growth rate over 2003. Estimates from American Technology Research (35%) and Deutsche Bank (33%) are even higher. The majority of estimates fall into the 10% - 20%+ range. Amazingly, we could all be wrong – on the low side. The IAB/PwC, which eMarketer uses a benchmark for projections, reports that overall online ad spending shot up 39.7% in the first half of this year. I remember the moment, when at the Interactive Advertising World conference in New York City last September, Greg Stuart of the IAB made the announcement about the nearly 40% growth figure. It was a great way to kick-off the IAW event, which took place during Advertising Week in New York.
Based on eMarketer’s growth rate of 28.8%, we’re looking at an annual spending figure of $9.4 billion. That’s over a billion more than was spent in the Internet hey day of 2000 ($8.1 billion). It’s also more than consumers spend every year going to the movie theaters. It’s even more than the combined revenues of WPP and Grey Advertising. The growth train is not stopping anytime soon. In fact, I expect 2005 online ad spending growth to come in at 20.2%, with double-digit rates of 17.7% and 16.5%, respectively for 2006 and 2007.
What’s Driving Growth?
Researchers and analysts love to speculate about the future, throwing out predictions about every aspect of the industry, but what’s important is to look at the market fundamentals that drive advertisers to spend their dollars online. Seven factors drive interactive advertising today:
1. The consumer is in control
2. The Internet delivers on the corporate mandate for marketers to be more accountable
3. The economy continues to plug along with reasonable growth
4. Broadband is changing the consumer Internet landscape
5. The crack in the foundation of the $60 billion TV industry is widening
6. Search continues to evolve and draw more dollars
7. With increasing numbers of Americans online, marketers have greater opportunities to reach consumers who are interested in a given category.
|
Knowledge Articles:
(Updated every month)
» What is rich media?
» What is viral advertising?
» How to get noticed online
» Industry statistics & data
» Rich media guidelines
Downloads (PDF/PPT):
(Right-click and save target as ...)
» Reasons to use interactive advertising
» 6 principles of effective online advertising
» Rich media complete guidelines
|
