The IAB just released their annual advertising report and shows healthy year over year growth in the category. Online Advertising grew by nearly 22% in 2011. It would be easy to characterize this as further evidence of the Internet’s inevitable dominance over other mediums.
In the report and handful of data point jumped out and further cement the primary use of the Internet as a direct response medium. 2 data points in particular:
– 65% of all Internet Advertising revenue came from performance pricing (cost-per-click, cost per acquisition, etc.) That is up from 62% in 2010.
– Search spending grew by 2 points to 47% of the total dollars spent online. Everyone talks about online video and mobile as the big movers and search grew faster that video and kept pace with mobile!
As an industry, we are still struggling to move much money online for demand creation. This remains the single biggest opportunity for the industry.
Perhaps the problem is people like me keep calling it brand advertising. This is all about creating demand. When we get better at proving the effectiveness of the internet at building demand, then the long predicted shift from TV advertising to online happens.