Who Doesn't Like a US Internet Eyeball?
The Interactive Advertising Bureau reports that US Internet Advertising Revenues in the first Quarter of 2011 reached a record $7.3 billion. The report is conducted independently by the New Media Group of PricewaterhouseCoopers.
The US accounts for 43% of the global online advertising market, which itself has grown from $15.9 billion to $18.2 billion in the same period.
The US 23% increase over 2010 Q1 results was in turn 7.2% over 2009 Q1 results. This compounded 32.7% increase in two years is in a time when the US Gross Domestic Product rose only 6.8%.
From this we see that the US is spending more an advertising than any other nation, and this disparity is increasing.
But why the increase in the US? The appeal of online advertising is simple - it allows advertisers to tie very closely to publishers' content to allow very focused ad placement. To small business where advertising spends are low, this selectivity allows ads to reach a niche audience and to warrant the spend.
For the ninth quarter in a row, display advertising has been rising faster than search advertising, which means ad content in sites is more valuable to advertisers than having a site show up higher in search results. This implies that getting people to a site is one thing, but getting people to pay attention to a site is another.
One answer is that better content makes for more time spent in front of ads, which leads to higher conversion rates. As new media rises, and people are touting that "Print is Dead", it's clear that content is still king.