The online advertising industry has marked a “turning point” in its attitude to online marketing, according to Tim Armstrong, advertising sales vice president at internet giant Google, who told delegates at the Reuters Media and Advertising Summit that, after a period of trepidation, the medium is now beginning to attract sizeable investment.
“The experimenting and testing phase begun in the 1990s has ended. Corporate ad buyers are investing now,” he said. “There is robust interest in online advertising and that interest is now turning into real dollars.”
The internet mogul cited analyst predictions that 2005 would see a total banner ad market worth between $10 billion and $15 billion, explaining that adoption of the online services has so far outpaced advertisers’ spend on the medium, pointing towards a period of intense growth in the near future as marketers attempt to regain lost ground.
As an operator of search-based marketing, Google is well positioned to benefit from the growth in adspend, Armstrong explained, although it will also benefit rivals such as Yahoo and Microsoft’s MSN, which recently launched its own keyword-based ad services.
“Some [advertisers] are putting 10% or even more of their 2006 budgets into online,” Armstrong explained, and while there are still a large number of firms not utilising online media there has been a notable upswing.
However, there is still room for traditional advertising, according to the Google, which recently began selling adspace in technology trade publications. “We started with text, we now offer graphic ads and are moving into print advertising,” Armstrong said.
Another area of expansion is video advertising, with Google’s stated long-term goal to provide advertisers with space in every possible medium.
Last month saw research published by online analyst eMarketer showing that, while the growth of online video advertising poses less of a threat to traditional TV advertisers than originally thought, there remains huge demand for the medium, with over 94 million American consumers, or 56% of the domestic Internet population, claiming to have watched streaming video online (see Online Video To Compliment TV As Demand Grows).
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