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Increase of 38% in Q1 for Online Advertising!

(by Lucas Roze)

Online advertising is amongst the fastest growing advertising medium. In recent years, the growth patterns have been nothing shy of astonishing. The last quarter (Q4) of 2005 saw a rise of 6% in the US for market, and even more impressive is the Q1 of 2006 that saw a 38% increase, according to a report published by the Interactive Advertising Bureau. This last increase equates to a record $3.9 billion in the, presumably, slowest months for advertising.

Online behaviour in North America has shifted to the faster broadband connection approach for more efficient surfing. This transition of speed opened a fundamental door for online advertising, allowing advertisers to offer what is known as rich media. Rich media is described by Wikipedia as an “interactive digital media that exhibits dynamic motion, taking advantage of enhanced sensory features such as video, audio and animation”. This type of media is ultimately focused towards broadband connections. Broadband is ideal because of its rendering capabilities. This new wave of online advertising is not only attention grabbing, but can be better targeted to the audience that is more likely to purchase the product or acquire the service. Therefore, this equals to a much greater ROI for far less costs than conventional advertising.

Furthermore, companies like eBay and Yahoo are teaming up to drive more effective online advertising. Google is still the current champion in this field with over 90% of their revenue. Moreover, big companies in other sectors such as Merck (Pharma), Procter & Gamble (Products) and GM (automotive) are focusing their budgets to the online vessel which helps to leverage the market.   

With the current population more reliant on the Internet to gather information and purchase products than traditional sources, it seems only natural that advertisers will focus online to target their client base. While television and print ads seem to be losing their lustre, online ads are the next cost effective solution. This radically upward slopping trend seems to be creating more buzz to advertise online, but the down side to this is that the more people advertising means the inevitable elevation of prices. However, things are looking up, Forrester Research predicts that online spending will increase to $26 billion by 2010 (4 years away!). That’s $26 of $500 billion total advertising expense worldwide or (5.2%). So online advertising will only get better and more precise in the years to come, so plug in your mouse and start clicking.

By IC-Academy | May 31, 2006 | E-Advertising , News & Trends

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