Peter Kafka

Recent Posts by Peter Kafka

Online Ad Growth: Already Over, Except for Google

Are you still thinking there might be growth in the online ad market next year? Perhaps this will disabuse you of the notion: New numbers from an industry trade group indicate that growth has already stopped for everyone except Google.

That’s not what the release from the Interactive Advertising Bureau and Pricewaterhouse says, of course. It notes, instead, that the industry notched 11 percent year-over-year U.S. revenue growth in the third quarter of this year, and two percent growth compared to last quarter, which it says indicates a “stabilized” market.

But when the trade group for an industry known for go-go growth says things have “stabilized,” you know things are grim. Here’s what “stabilized” growth looks like in graphic form (click to enlarge):

But here’s the really disturbing thought for everyone who depends on Web ad revenue, or the promise of Web ad revenue (and yes, I’m talking about my employer as well): What would that chart look like without the contributions of Google, which grew 31 percent in the last quarter (and two percent compared to the previous quarter)?

By the IAB’s own count, search revenue makes up a little less than half of its total (44 percent in Q2), and Google (GOOG), of course, accounts for the majority of that market. You do the math. Or better yet, spend that time figuring out how to stay afloat for the next year.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work