Internet advertising revenue soars – how much further to go?

The latest Interactive Advertising Bureau statistics show almost $4.8bn in internet advertising revenue for the fourth quarter of 2006, with full year figures reaching $16.8 billion. The graph below shows that the sustained uptrend of the last 4 ½ years, post the dot-com bust, is now being exceeded. One thing that irks me about the IAB figures is that I have never seen them specify whether these figures are for the US or global. I suspect it is the former, which begs the question of the scale of internet advertising revenue in the rest of the world. Given total global advertising revenue is estimated at $406 billion, the IAB figures suggest there is plenty of room for upside, and no immediate likely fears of a plateauing in revenues. Yet the recent exponential growth will be very hard to sustain for an extended period without a subsequent fall or tailing off of advertising spend. The global economy has shown its brittleness in the past weeks. It would certainly be interesting to see where advertisers would cut their spending if forced – perhaps it would be less on the internet, and more on the traditional media channels that are continuing to struggle. Valleywag calls the chart “statistical porn”, promising that every startup will now include it in their presentation…

On reading the release, I was surprised to see that Randall Rothenberg is now CEO of the IAB. He was previously at Booz Allen Hamilton as Senior Director of Intellectual Capital, where I caught up with him last year to chat about some of my research into influence networks and high-value relationships. He was previously editor-in-chief of the excellent Strategy + Business magazine, though ceded that role to Art Kleiner a couple of years ago to be more involved in the firm’s internal strategic initiatives. Randy’s a very talented guy, so it will be interesting to see which way he takes the IAB.