Online advertising revenue hits record high

Newspaper reading

Though newspaper subscriptions are declining, some companies are moving into consulting as a way to gain revenue. Image: Flickr / zoetnet / CC-BY

The Interactive Advertising Bureau has released its newest statistics on online advertising. Worldwide, online advertising revenue brought in more than $7.3 billion in the first quarter of the year, a new record. Facing numbers like these, many previously print-based businesses are starting to expand their offerings, sometimes in unusual directions.

The current state of online advertising

In the last year, online advertising has experienced huge growth. The $7.3 billion spent on online advertising in the first quarter of 2011 is a 23 percent increase over the same quarter of 2010. Display advertising is the fastest growing market, and search advertising still makes up the biggest chunk of the online advertising dollar. Online advertising is blowing far past analysts’ expectations and far outperforming most other advertising.

Newspaper revenue continues to decline

As online advertising income continues to grow, it continues to contract for traditional print media. An analysis done by Business Insider shows that print-media readers tend to earn newspapers about $385 in advertising dollars per year. An online reader earns the company about $3.85 in advertising revenue per unique visitor. The New York Times currently claims about 45 million unique visitors a month on and 1.6 million print subscribers. The number of print subscribers each year has been continually going down.

Old companies finding new paths to revenue

Some print publications are getting creative in approaching this new challenge of shrinking revenue. Some publications are attempting to put pay walls around their online content or provide unique content via paid applications. This paid content can be useful but will likely not earn anywhere near the income that traditional print readers would have created. The trade-off is that web advertising tends to be more targeted, meaning that it can be more effective. This combination of lower cost and higher effectiveness means that more advertisers are willing to take the risk. A few companies, such as Conde Nast publishing, are taking their newfound web expertise into new revenue streams. A service called “Ideactive” puts Conde Nast’s online advertising and online marketing team to work as consultants, helping advertisers build a more effective web presence that will magnify the success of their ads.

What this means for ad publishers

The growing revenue that online advertising is creating offers many opportunities for ad publishers. The pie is getting bigger, and publishers that can show results have more opportunities. Micropayments and small-payment ads that cost less than $1 each will continue to be a revenue-growth area of advertising. The entrance of big companies, such as Conde Nast, into the SEO and advertising consulting market means that any good consultant, company or service needs to be able to both find a niche and show demonstrable results in order to provide value that advertisers are willing to pay for.

More Reading

IAB quarterly report
Business Insider

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