Friday, June 08, 2007

Internet Advertising Revenues -- Unstoppable?

As can be seen in the graphic below, the shift in advertising from the offline world to the online world continues to accelerate at an astonishing pace. According to the Internet Advertising Bureau (IAB), Internet advertising revenues in Q1 of this year grew a remarkable 26% over Q1 of 2006 (reaching $4.9 billion for the first quarter of '07). What's particularly impressive about this Q1 '07 number is that the first quarter of each year is traditionally the advertising world's most sluggish period. And, with new ad platforms coming online (video ads, as just one example), this trend shows no sign of abating -- in fact, the slope of such growth is accelerating.

So, what is "traditional" offline media to do with this onslaught? Well, experimentation continues -- as one example, NBC just aired its first live television spot on the Tonight Show since 1995 this past Tuesday in an attempt to foil the TiVo crowd (read about this in today's Wall Street Journal on page B3). Also, think about the promise of adding online elements into the "offline" television world -- such as live interaction with viewers (both with text and video to win contests and the like).