A study out recently by eMarketer highlighted the rapid expansion of Internet Advertising over the next few years, projecting total Internet spending to reach $42 billion in 2011. This rapid expansion will move Internet advertising from about 6% of overall media expenditures to over 13%. This massive shift in spending presents some interesting challenges and opportunities to the rapidly changing world of digital media.
What impact will that have on current advertising models and how will the increase be impacted by the web 2.0 world?
It is clear that a doubling of advertising spending will have a significant impact on the return on investment for paid advertising. With efficient, real time advertising models (think google), the price of premium ad words and geography should increase dramatically. Sounds like good news for content companies? Maybe…
There is also an explosion of new web 2.0 media companies entering the market that are both content creators, content distributors and user-generated content platforms. One interesting model is Moving Off Campus, an integrated marketing company that operates a sophisticated web portal targeting colleges students.
Another noteworthy entry is ITOG (is this one good) a start-up with an impressive preference and personal recommendation engine with some very sophisticated algorithms. ITOG, also a robust social networking platform is centered around the fun of ranking everything. Not a new concept, but ITOG is certainly the most advanced out there today.
With $21 billion of new advertising dollars entering the market, there is lots of opportunity and there will continue to be many more interesting ideas hitting the Internet.