Online advertising explosive growth, a reason to worry?

By on October 13, 2007, 4:47 AM
According to an article posted on News.com, online advertising is expected to see a record $31 billion this year which is approximately 25 percent higher than in 2006, compare that to the more moderate growth seen with standard media like TV, radio or print that are growing at about 3.7 percent.

Certainly the weather has changed for online businesses with advertisers and marketers paying more attention than ever to the web. However the article makes a good point in that with many more businesses trying to cash in on the web and basing its operations on advertising revenues alone, so there may not be enough to stretch the pie and give everyone its fair share of ad money in the longer run.

Compared to the days of the dot com bubble online businesses nowadays are more realistic on its expectations and moderate on its assumptions. Furthermore, ad targeting technology has reached a new milestone and big players like Google have intelligently placed its cards giving more power to small businesses and individual bloggers, effectively reaching niche markets that otherwise would have gone unexploited for a longer time.

However when we keep hearing things like Microsoft, Yahoo, Google burning billions of dollars in buyouts to expand their ad sales businesses, we have to wonder at which point will they go beyond what the market can deliver? The message seems to be clear for some, the fight is not only taking place within the web but outside of it. With $450+ billion spent on advertising worldwide every year, the Internet still accounts for less than 10% of that budget, so stealing some thunder out of print and TV has to be the major target.




User Comments: 1

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Nirkon said:
Probably because Google Adsense picked up millions, it donates a large percent of that ads, plus a lot of companies started rivaling google adsense as well.
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