Having a hard time convincing your CMO that online advertising is worth the investment? Then you might want to show them the new report produced by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers, LLP (PwC) and first reported upon by Direct Marketing News. The findings showed that Internet advertising revenues for 2012 came out to about $36.6 billion. This is a 15% increase from 2011, where online ads generated approximately $31.7 billion.
The term “Internet advertising” is extremely broad; from where exactly did all of this money come? The report goes on to break down the profits:
1. Search accounted for $16.9 billion, or 46.3% of the total revenues produced online; in 2011, search created $14.8 billion.
2. Display and banner ads brought in $7.7 billion, or 21% of all digital advertising revenues for the year.
3. Mobile and tablets brought in $3.4 billion; while this might sound like small beans compared to search, that number jumped 111% in a single year – mobile only generated $1.6 billion in 2011.
4. Email brought up the rear, with $156 million in revenue this year, or 0.4% of the total digital advertising revenue. Email was also the only channel that experienced a drop in profits from 2011-2012; the channel generated $213 million in 2011, which means that email experienced a 27% drop this past year.
What does all of this mean to advertisers? Digital advertising is a huge moneymaker for direct marketing, with almost all of its channels experiencing tremendous growth from year to year. However, it is important to remember when looking at reports of this nature to keep everything in perspective, and to keep your own business’s needs in mind.
This report isn’t a sign that you should stop running email campaigns and put all of your money into search; you have to examine your digital marketing strategy as a whole, and allocate your resources in a way that makes sense for your company – and its customers. There may be some areas where you can redistribute resources, but your strategy is a sum of all of its parts – you shouldn’t throw one away simply because it didn’t grow.
inSegment emphasizes the importance of a multi-channel, integrated digital advertising system, including search, mobile, email, and display advertising. We’re excited to see the results of this study; it means that there are new technologies and data points being introduced into the marketing mix, which means there are more opportunities to connect meaningfully with consumers. We expect the trend of growth to continue on for some years to come.