Monday, May 24, 2004

Internet advertising is back

Internet advertising revenue was about $2.3B in Q1 2004. That's the highest ever, beating Q4 2002 revenue of $2.2B and surpassing previous peaks in early 2000.


Seun Osewa said...

The increase in ad spending means more advertisers are looking to the net as a good medium for promoting their businesses, but does it necessarily mean they are getting their money's worth?

Greg, I use it too, but do you notice that the blogger commenting system is not very straightforward and seems to discourage people from posting?

Greg Linden said...

"Getting their money's worth" relative to what? Relative to traditional mass market advertising?

Becuase internet advertising is targetted, easily tracked, and easily analyzed, it's relatively easy to determine the direct impact. Unfortunately, that's not true with traditional advertising. Typical techniques include measuring the increase in sales, new customers, or brand awareness after the advertising or compared to markets where the advertising didn't run, but that technique is noisy, indirect, and imprecise.

I don't know of any good studies that provide a detailed analysis of the effectiveness of internet vs. traditional advertising. A quick search came up with this old Gardner Research report that does a overly simplistic analysis of cost per new customer with very little hard data to back up the analysis. If you come across better studies, please let me know.