Within the whirlwind of negative news regarding the economy and the advertising outlook, I found a significant, welcome trend in the IAB's recent revenue report covering the first half of this year. I'm scratching my head trying to understand why more hasn't been made of this, because it portends hugely positive things for the online space.
The IAB recently announced a 15.2% year-over-year growth rate for Internet advertising for the first half of 2008. When you dissect the 15.2% number, some interesting details emerge. Out of nine industries tracked, only four have grown from last year. In and of itself, this finding would fall in line with all of the other negative things we're hearing about the prospects for advertising.
However, look at the list of the four growth industries: CPG, Auto, Telco and Computing. Do you see what I see? These industries have consistently been the big overall ad spenders for a long, long time. Companies within these four industries make up 42 of the Top 100 national advertisers, and 52% of the advertising spend. And note that the two largest ad-spending industries, i.e. CPG and Auto, have been largely absent from the digital world until very recently. When you combine these four industries, their online ad spending grew 29.8% on a year-over-year basis from the first half of 2007.
The implications of all this? If the big ad spending industries continue to embrace the online medium more aggressively, chances are good that new, significant waves of growth are in the works for the interactive space. In his recent forecast, Jack Myers makes this interesting statement: "We are in the dead center of a two-decade industry transformation that began with the launch of Google in 1998. It will be 2012 before the industry of the future - the 21st Century model of the media and advertising industry - will begin to prosper." While new technology trends typically get all the buzz, I have this sneaking suspicion that some of the leading advertisers that make up big ad-spending industries may be out-innovating all of us, and we will see new online market mojo well before 2012.