December 25, 2007
Internet Advertising
This is a short synopsis of advertising and the Internet.
There are a few direct ways to make money on the Internet. Subscription to services, sale of goods, and advertisements. For pure online plays, in other words businesses that are in the business of information, it’s either subscription or advertisement to monetize content.
As time passes, fewer and fewer companies can survive based on the subscription model. People want free access to online information. Today, advertisers provide a means for the average person to freely access online content.
This is why we see the domination of Google, a company that makes 99% of its revenue through advertising… $11.6 billion in 2007 to be exact. Advertising networks drive the monetization of today’s Internet. Content exists, people want it, producers and publishers rely advertisers to sponsor their content.
Here are some figures…
- There is $26.53 billion spent on advertising for Internet, mobile, video games and digital out-of-home
- Total Internet advertising is projected to to reach $61.98 billion in 2011, surpassing newspapers as the nation’s largest ad medium.
- Marketing segment is a $254.01 billion industry
The advertising market seems to be bubble proof and Web 2.0 proof. Regardless of the *what* and *how* of the medium, it’s going to be sponsored by advertising until there is a cultural shift or another clever way of monetizing eyeballs on digital content.
In an effort to capture this revenue, ad optimization is the game. Advertising networks such as Google, Yahoo, AOL, and Microsoft among many others are working on providing the best click-through and conversion rates to keep advertisers paying and keep content publishers paid.
Contextual targeting, recommender engines, consumer behavior tracking, and now social networking are the means for optimizing advertisements online today. Making sure the right person is looking at a relevant advertisement keeps this market growing. Undoubtedly there will be other methods of creating optimized advertisements in the future.
