Internet Advertising Revenues Surpass $4 Billion for Q3

IAB Press Release – Internet Advertising Revenues Surpass $4 Billion for Q3

Yee-haw. Check out the chart.

“The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP today announced that Internet advertising revenues reached an estimated new record of $4.2 billion for the third quarter of 2006. The 2006 third quarter revenues represent a 33 percent increase over $3.1 billion in Q3 2005 and a 2 percent increase over the Q2 2006 total of nearly $4.1 billion.”

Calacanis says the best is yet to be:

“How far will this trend line go? Think 20 more years of similar growth.

Will it get steeper? Absolutely.

Why? Video and audio advertising hasn’t even started to move to the Internet in a major way.

The first 10 years of this industry have been amazing, but the next 20 are going to be insane.”

Kind of cool for me to look at the start of the chart and realize I was collecting ad dollars at Forbes in ’95 before anyone seemed to be counting. Rode the pony right to the dot.bomb peak in Q2’02, came back in Q2’05 and now am on the spend side. This is not going to slow down — I’m with Jason, just watch, it gets really interesting in the next 12 months. Makes me want to be back on the media side … wait, someone punch me.

Om demurs:

“He is right because as online video becomes more popular, the advertising dollars are going to shift to this nascent medium. Those dollars will qualify as Internet advertising, of course. He is wrong, because he is conveniently overlooking the fact that the sequential growth in advertising was essentially flat7. “Online advertising will be a useful marketing tool, but no trend goes in a straight line for twenty years,” writes Carl Howe, in his excellent analysis.

Calacanis overlooks the fact that a disproportionate portion of the online advertising dollars is flying into the pockets of a handful of companies. A back of the envelope calculation shows that in the third quarter Yahoo and Google accounted for $2 billion (give or take a few million dollars) in total dollars spent on online advertising in the third quarter 2006. (This is after traffic acquisition costs, and factoring in their international contribution to their total revenues.)”

I think both Calcanis and Malik assume a continuation of the current eyeball model — the gross tonnage model of advertising I’ve posted about previously. That “1.0” world is based on reach and mass with economics measured in cost per thousands, click-through rates, cost-per-click, cost-per-acquisition, and cost-per-lead. Behavioral models, such as those promoted by Tacoda; or RSS models such as Federated’s, give a bit more precision and reduce the “gross” to “less gross” but the industry is still waiting for a way to monetize the long tail and give some economic value to engagement.

I can’t predict the next big thing in advertising, but will assume the next Bill Gross is working on the breakthrough that will start the cycle all over again. That assumption may be like wishing for a pony for Christmas, but I believe it is a shift in models, not the rise of new mediums — ie video — that will drive the continued growth.

I need to find where interactive now stands in the overall ad industry mix. Last I checked it had passed billboards.

New York Times falls into time warp — publishes story from 1996

How to Make Your Web Site Sing for You – New York Times

Scanning the daily headline email from the Times, I see this article by Eric Taub which essentially says that a corporate web site is important to its image and must be well written, filled with “addictive” content, and even includes the omnipresent Jakob Nielsen opining away.

WTF? Is it that slow of a news day that the Times has to dredge up the pablum we all had to endure in the mid-90s?

“Build a bad-looking small-business site filled with poorly written text, and your potential customers will go away. Build one that is attractive, compelling and clever, but crucial design mistakes will still guarantee that few people will know that the site exists.

Your Web site is like a digital business card, designers say, the first online look at your company that a customer gets. With luck, it will not be the last.”

Corporate criticism on a personal blog

There have been four or five occasions over the past ten months where I have found myself in disagreement with some corporate action and tempted to open up a new post and write about it.
So far I have resisted the temptation, but every time I do, I ask myself the question: “What would Scoble have done?” — in reference to ex-Microsoft blogger Robert Scoble, who earned the reputation of being a voice of candor in an organization viewed rightly or wrongly as impenetrable with a wall of highly managed corporate communications.

This blog is a personal possession that predates my employment. I talk about my professional life here — more in the interest of disclosure and reality than promotion — but it is not a corporate communications vehicle and as such, represents an interesting balancing act for me between personal and professional opinions.

Since my job description does not include the responsibilities of an ombudsman, I am not losing sleep over any ethical cowardice — none of these issues are Karen Silkwood whistle-blower types of things. People don’t die, wetlands don’t get poisoned … but they are actions which I feel, on occasion, either undermine our reputation (which is in my job description), will annoy our customers, (customer satisfaction is in my job description), or present a picture that is less than flattering.

I do push these issues very hard internally. I just fired off an note this morning on a new issue and will work towards some type of resolution as soon as I can, but airing that issue in public — and the issue is public because we published it and are being called on it in public — is not going to accomplish anything other than to pose a rhetorical question into the ether asking for another point of view.

I helped develop our corporate blogging guidelines — they are concise, less than two pages in length, and basically apply a Golden Rule type of guidance. They are not restrictive — they don’t hold bloggers to any standard of review or prohibition, aside from the sensible mandate not to divulge company secrets or material information that could affect the share price.

So, this is basically a disclosure statement that I am not the corporate ombudsman, nor am I going to tempt the fates by poking the hive with a stick.

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