Internet Ad Revenues Continue to Climb

With effort, I can cast my memory back through the misty past to our founding nearly four years ago. I recall chuckling when asked if we had a business model for Blogcritics. The very term “business model” seemed absurdly inflated for a site that was a very modest Amazon associate, and one that was a beta tester with a new company called “Blogads,” which had the audacity to claim blogs would soon be a legitimate ad market.

Much has changed in the interim: our traffic has risen by a factor of about 70, being an Amazon associate is still a rather modest proposition, but Blogads has become a thriving company, with its core task of convincing the marketing world that blogs mean business largely accomplished. Most striking of all is the rise of online advertising in general, which benefits all boats, big and small.

According to the Internet Advertising Bureau and PricewaterhouseCoopers, total US Internet ad revenues in our fateful founding year of 2002 were just over $6 billion. Revenues more than doubled to $12.5 billion in 2005, and reached a new record of $3.9 billion for the first quarter of 2006, which represents a 38 percent increase over Q1 2005, and a 6 percent increase over Q4 2005. Estimates for ’06 range from 20-30 percent increase over ’05 (much more granular data can be found on the IAB site).

“The steady growth of online advertising is a clear indication that marketers continue to believe in the opportunities and effectiveness that this medium delivers in reaching and engaging their consumers,” said Greg Stuart, CEO, Interactive Advertising Bureau.

Internet ad revenues are also cranking on those funny islands across the Atlantic where they purport to speak English. Per the Guardian, GroupM, the holding company that accounts for about 30 percent of global media buying, will say in a report to be published next month that UK Internet ad revenues will be about $3 billion, or 13.3 percent of the $22.8 billion UK advertising market in ’06, surpassing national newspapers with a share of 13.2%. And this figure excludes the estimated $1.9 billion a year spent through “affiliate programs” on smaller websites, which would bring the total closer to the $5 billion range. In 2000, the Internet controlled only 1 percent of the British advertising market.

“The Internet continues to shape the media landscape as more advertising dollars [and pounds] are going online,” added Peter Petrusky, Director, Advisory Services, PricewaterhouseCoopers. “It is abundantly clear that marketers are seeing a compelling opportunity to leverage the Internet as a powerful medium that drives both branding and sales results.”

And that is an excellent sign for “alternative” media outlets such as Blogcritics.org