Wait…..really?

Well, only if you consider web development costs as part of Internet advertising expenditure.  The report counts the money companies spend on their own websites as part of their advertising budgets, using the logic that websites are ostensibly used for marketing.  Its data indicates that companies are expected to spend $105.3 billion online in 2008, which beats the $98.5 billion they’re projected to spend on TV, radio and movies.  Still, give the fast paced growth, Internet advertising is not expected to eclipse the $147 billion likely to be spent on print media, up 12% from the previous year.

All in all, Internet advertising is riding a fast wave of growth.  According to the report the media platform is expected to grow 12.3% in 2008, most of which will be spent on companies’ own websites, rather than on marketing agencies or search or display ads.

The 1,088 US-based companies surveyed will spend $61.5 billion, or 61.8% of their online advertising and marketing budgets, on their own sites, siphoning away money from other options.

The report also predicts that advertisers will still spend the most money on print media in 2008. Companies will spend 35.5 percent of their budgets on print media in 2008, and will spend nearly a third of that on newspapers.  That’s down 4 percent from the previous year.

“(Mobile) was the largest recipient just two years ago,” tech investor Jared Wiggins said. “As investors we are perhaps hoping that ‘if you build it, they will come.’  But the infrastructure hasn’t facilitated its use.” And Wiggins said that even the new 3G iPhone wouldn’t spark increased interest (or investments) from financiers in the short term.

“Marketing budgets for the current year were revised down for the third consecutive quarter in Q2, with the rate of decline gathering to a pace not seen since budgets were hit in the immediate aftermath of the 9/11 terrorist attacks in late-2001,” the report said.

“This raises the possibility that marketing spend could fall this year for the first time since the survey began in 2000,” the report’s author Chris Williamson said.

“Even Internet marketing was not immune, seeing the smallest increase in spend for five years.”

Traditional media such as television, press, radio, cinema and outdoor suffered sharp downgrades, with budgets dropping at the fastest rate since the first quarter of 2006.  Read the full article here here

Despite the fast paced growth of Internet ads, online advertising was still outpaced 15 times over by traditional advertising. Revenues for newspapers, magazines and broadcasters from advertising in the first half totalled 10 million euros, Nielsen said in Hamburg.

Here are her top 10 suggestions:

1. Banner Advertising
2. Paid Posts
3. Sponsorships
4. Charge for ad-free usage
5. Tiered subscription model (free for everyone but charge for special features like photos, etc.)
6. Offer a monitoring package for businesses (to track their brand identity within Twitter)
7. Charge companies that use the Twitter API
8. Affiliate program (pay users if another use buys a service/good based off of your reccomendation)
9. List rental
10. Mobile payments

The subscription models seem dubious and at least one suggestion, affiliate marketing, seems to compromise the integrity of the social network. The most creative suggestion is mobile payments.  Chang, assuming the mobile payment market is set to explode (which it is), makes the argument that it will require a site which already has some kind of user network for mobile to succesfully integrate.  Additionally, Chang sees powerful synergies from sharing data tracked by mobile consumer behaviour and the kind of data and information submitted to Twitter on a regular basis.  Read her full article here.

“The deal is clearly financially beneficial for both Yahoo and Google, however, advertisers need to be aware of the potentially significant impact to their search marketing efforts,” Roger Barnette, SearchIgnite president, said in a statement. “Most marketers will see their overall costs for search advertising across the Yahoo network increase, and will need to adjust their search strategies accordingly.”

SearchIgnite’s findings share a particular relevance as lawmakers are scheduled to meet shortly to discuss antitrust concerns arising from a Yahoo-Google deal.

According to Yahoo the site planned to use Google ads primarily for its tail category of links, keywords used for the most specific of targeted searches.  While the first search keyword return differs by about 12% among Google and Yahoo, it differs by as much as 28 percent or more for the No. 5 spot.

According to the report:

The price difference for bidding on tail terms on Google vs. Yahoo increases as the ad’s page rank decreases. Therefore, it would be economically advantageous for Yahoo to outsource a significant amount of their tail term inventory, paying closer attention to the outsourced inventory’s rank rather than the keyword terms themselves. Acting this way, Yahoo should be able to better monetize the majority of their tail terms with the Google partnership.

Interestingly, Yahoo generates more revenue (charging more) for its top head terms, terms that are more generic in nature (a la “web hosting). 

While a Yahoo-Google combination will certainly reap synergies in terms of sharing of advertising relationships and information, a sudden rise in cost for certain keywords for no other reason other than the combination will undoubtedly raise anti-trust issues.  

 
Below is a visual map of each banning country and the density of sites banned.

While the ad hasn’t been popular on television it still has a second life, like many things, on the Internet.