Online Advertising Growth and Social Networking Projections
Here at Ad Chap we are bullish on both online advertising and global social networking growth. As advertising online gets more sophisticated, advertisers are able to better target their audience, get better stats and see more measurable results. This is bringing a larger share of advertising budgets online.
US Internet Advertising Revenues Top $21 Billion In ‘07, Reaching Record High. In this May 15, 2008 report by the IAB (Interactive Advertising Bureau) and PWC (Price Waterhouse Coopers) they found:
• For the full year 2007, revenues totaled $21.2 billion, exceeding 2006 performance by 26 %, itself the former record year.
• Q4 2007 Internet advertising revenues hit $5.9 billion, representing historic revenues for a single quarter and a 24% increase over the same period in 2006.
• This is the fourth consecutive year and 13th consecutive quarter of record results.
“Despite the current state of economic uncertainty, 2007 was another record year and the 13th consecutive record quarter. Interactive advertising is not just the future, it is the here and now, as it represents a meaningful and growing component of U.S. advertising and marketing spend,” said David Silverman, partner, Assurance, PricewaterhouseCoopers.
Another point of interest from this report is that Internet advertising revenues surpassed Radio advertising & Cable Television advertising in total U.S. ad spending in 2007.
Since this report is USA only, it does not give the whole picture however. Another report from Aegis PLC and Carat shows GLOBAL online Internet advertising spend to grow 23.3% in 2008 with Russia, Eastern EU countries and the Asia Pacific region and Latin America charting the fastest growth worldwide.
North American growth is less stellar with USA projected to grow 3.9% and Canada to fare a little better at 7.2%.
Noting the lower growth numbers for North America, we have also been seeing reports in the news that social networking sites myspace and facebook are seeing user growth plateau. This has led many of the social networking bears to write “I told you so” articles about the sustainability of social networks. Not so fast!
We do believe that social networking use will be approaching the saturation point in the USA and some other developed markets in the next few years. For the rest of the world however, there is massive growth in social networking use happening.
We are looking forward to see what the future brings and believe that social networking and new possibilities for ultra targeted advertising are just getting started.
With the combined growth of online advertising spend and global social networking growth, we expect exciting times coming up for Ad Chap and social networking advertising.
Links
The full IAB - PWC USA Advertising Report is available here. http://www.iab.net/media/file/IAB_PwC_2007_full_year.pdf
The Aegis - Carat Global Advertising Report is available here. http://www.aegisplc.com/ags/media/groupreleases/grouprel2008/2008-03-17/
