Page 78 - Marketing the Basics 2nd

70 Marketing: the Basics
Table 4.1
Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Online marketing spending
Billions (US$)
0.9 1.9 4.6 8.1 7.1 6.0 7.3 9.6
12.5 16.8 21.2
% change
— 53% 58% 43% –13% –19% 1% 25% 23% 26% 20%
of the primary reasons why Google has such a lofty evaluation on the stock-market today.
Worldwide online advertising spending in 2008 was estimated at $65 billion by the Internet Advertising Bureau. As large as that figure might seem, remarkably, it only accounts for a fraction of the total amount of the money spent on traditional advertising. Worldwide expenditures on traditional advertising is in the neighbourhood of $650 billion in the same year.
However, the gap is closing. Ten years ago, advertisers spent a miniscule 1 per cent of their advertising budget on online channels,
30% 25%
5%
% Consumer time spent online % Advertising dollars spent online
20% 15% 10%
The marketing confidence gap
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Rate of digital adoption by consumers versus online advertising expenditures by advertisers (source: e-Marketer, 2008; Edison Media Research, 2008; MRI, 2008; Nielsen Media Research, 2008; Neo@Ogilvy Media Analytics, 2008)
figure 4.2