Internet Advertising Soars Bolstering Economic Recovery

May 13, 2010 Updated: October 1, 2015

Yahoo! billboard in California. Internet ad sales seem to be growing in strength with first-quarter revenue rising 7 percent. (David Paul Morris/Getty Images)
Yahoo! billboard in California. Internet ad sales seem to be growing in strength with first-quarter revenue rising 7 percent. (David Paul Morris/Getty Images)
Internet ad sales seem to be growing in strength with first-quarter revenue rising 7 percent, indicating the second consecutive increase since the last report according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

Revenue of $5.9 billion is at a record high for the industry, which suggests that the economy is in full swing and companies are confident making advertising expenditures in online marketing. The current report goes against the trend for this time of year, which is traditionally in a lull due to the post holiday period.

“We are seeing continued signs of an improved economy and interactive advertising market," said David Silverman, PwC Assurance partner. “The media industry —like the economy as a whole—saw tremendous challenges this past year, and uncertainty about the recovery remains. However, entering 2010 with such strong first-quarter revenues is a sign of the health and vitality of online media, and of marketers’ continuing investment in interactive as a cornerstone of their advertising campaigns.”

The advertising industry’s benchmark measure is predicting strong results for the online market going forward. Although the signs of strength have been identified in the form of advertising on the Internet, the economic crises have inevitably been a major factor for this shift.
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The Web-based platform has the benefit of accountability for marketers, with companies such as the high-profile French fashion label Lacoste opting to modify their complete budget from conventional channels to be all online since October 2009. Other companies following the similar direction includes high-end jewelry giant Tiffany & Co., Ralph Lauren clothing, and the Estée Lauder makeup brand, which have made major developments to shift consumers to the online market and/or mobile phone interface.

Nevertheless, Internet advertising did take a dive last year falling 3.4 percent to $22.66 billion, following the pattern of media expenditure deteriorating 12.3 percent in 2009.

On May 13 eMarketer, another independent research company that monitors advertising spending, adjusted their forecast for 2010 to reflect more rapid growth. It now predicts online ad revenue will reach $25.1 billion in 2010. This would be of a rise of 10.8 percent from 2009. Their estimate in December 2009 expected revenue to increase 5.5 percent to $23.6 billion.

The prognosis seems to be that there is strength in the online advertising industry, but this is really a cost-saving exercise where a company may get more ‘bang for their bucks,’ given that the economic climate is still mediocre. In other words, investing their marketing budget with the Web or mobile phone platforms, will not only be more interactive but also more measurable in terms of consumer response. Feedback and analytical data from tools that are tied to use of the Internet and mobile phone advertising gives companies a more strategic approach to generating profit and results. However is such a trend enough to prove the economy is robust?