Numbers released earlier this week show a 21% gain in Internet advertising from 2003 to 2004. Placing the category sixth — after a steep fall off behind cable TV — at $7.4 billion.
Although elections and the Olympics helped the surge, the general comeback of ad spending and the nearly 10 percent increase is directly correlated to the economy stabilizing out of its two-years of softness from 2001 through 2004.
The big issue is sustainability and how the next business cycle will affect advertising allocations from the Big Five of newspapers ($24.5 bn), network television ($22.5 bn), consumer mags ($21.2 bn), spot tv ($17.3 bn) and cable ($14.2 bn).
Given Google’s report that it did $1 billion in ad sales — I infer from Adsense — in Q4 2004, and extrapolating a ramp up across 2004 to $3 billion for the year, I wonder if ad word sales constitute the majority of the Internet spend as opposed to ad units and sponsorships sold directly by site ad sales staffs.
Some breakouts of the Internet ad spend are needed. The category is big enough and credible enough to deserve more parsing.
