July 7, 2008 – 6:28 am
2008 has been a tough year for a lot of industries and businesses, but one clear winner is the online advertising segment. Online ads have a lot of advantages over traditional offline ones. Online ads are very targeted, can be much cheaper, and are easily tracked. As companies have been spending less on traditional print, TV, and radio ads, more of the money is finding its’ way online.
The numbers predicted for online advertising are huge.
The global advertising market grew to just over US$600 billion in 2007, according to The Kelsey Group, the leading provider of research, data and strategic analysis on directional and interactive local media. The firm expects global ad revenues to grow at a compound annual growth rate (CAGR) of 2.7 percent and reach US$707 billion in 2012, propelled in large part by considerable growth in the interactive segment.
According to “The Kelsey Group’s Annual Forecast (2007-2012): Outlook for Directional and Interactive Advertising,” interactive advertising revenues will increase significantly from US$45 billion in 2007 to US$147 billion globally in 2012, representing a 23.4 percent CAGR.
This is truly great news for anyone who’s making money from online advertising. In essence, if you just track industry growth as an average player, you can reasonably expect growth of 23.4% annually. Of course this might not be true if your partners take a bigger cut of revenue, but with increased competition in the online ad arena, I’m not so sure they will.
If you can excel, then your chances for much bigger money grow even better. Traditional media’s loss appears to be new media’s gain. The continued downturn for offline companies represents an excellent growth opportunity for people with content websites, as long as you can provide a decent stream of eyeballs to advertisers. Well trafficked deep content websites are looking at their revenue doubling in the next 27 months alone, all things considered.
These are happy days indeed.
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