Internet Ads Are Booming

There has been much talk among stock traders and tech people as to what the near term future holds for Google. Some have been suggesting that AdWords revenue is flattening out.

The Interactive Advertising Bureau (IAB) released a report last week suggesting the the Internet ad pie is still growing. Revenue from online ads for the entire industry topped $21 billion in 2007, a 26% increase from the year before.

There was not any huge shifts in the type of online advertising that is making the money with the exception of online video and rich media. Last year, rich media and digital video constituted a 7% market share. This year, the online video has increased to the point that it has been broken out from the rich media. Together, this year, they constitute 10% of the market share. Good news for online advertisers who use video and other rich media to get their message out.

One other point brought out in their research is that the pricing models are swinging to performance deals (CPC, CPA, etc.) and away from CPM or impression marketing. Not really surprising. People always want to know that they are getting what they pay for.

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