In 2007, online advertising spending was estimated to be $19.5 billion in the US. (eMarketer).
Advertisers spent about $7.5 billionto reach all Western Europeans in 2007 (Phillips, 2007).
The economic impact of online advertising is documented in a report by Patti Freeman Evans, a senior analyst in the business-to-consumer market at Jupiter Research. She forecasts U.S. online sales will be $116 billion in 2007. Offline sales influenced by online research should reach $1 trillion by 2011 (Dawley, 2007).
| Search Ads (Fees advertisers pay Internet companies to list and/or link their company site or domain name to a specific search word or phrase...includes paid listings and contextual ads) Google leads in Search advertising. | 44% | $5.1 billion |
| Display Banner Ads (a graphic advertising image displayed on a Web page.) Yahoo is a market leader in dispaly ads. | 21% | $2.4 billion |
| Classified Ads (fees paid to list jobs, cars, real estate and other products) Craigslist, Monster and online newspapers lead here. | 14% | $1.6 billion |
| Lead Generation (fees advertisers pay to Internet advertising companies that refer qualified purchase inquiries (e.g., auto dealers which pay a fee in exchange for receiving a qualified purchase inquiry online) or provide consumer information (demographic, contact, and behavioral) where the consumer opts into being contacted by a marketer ) Bankrate, Cars.com, and LowerMyBills.com are examples of lead generators. | 7% | $806 million |
| Rich Media (advertisements with which users can interact (as opposed to solely animation) in a web page format. These advertisements can use sound, video, or Flash, and programming languages such as Java, Javascript, and DHTML.) | 7% | $806 million |
| Digital Video (video that can appear before, during or after content that includes streaming video, animation, gaming and music video content) | 3% | $345 million |
| Sponsorships (includes Spotlights are custom built pages incorporating an advertiser’s brand; Advergaming are game or a “sponsored by” link to creating a custom branded game experience; Content & Section Sponsorship is when an advertiser exclusively sponsors a particular section of the site or email ; Sweepstakes & Contests and Static ad placement that remain on a Web page for a specified period of time or embedded ads) | 2% | $230 million |
| Email (banner ads, links or advertiser sponsorships that appear in e-mail newsletters, e-mail marketing campaigns and other commercial e-mail communications) | 2% | $230 million |
Search Advertising has been increasing since 2004 from 40% to 44%. Video and Rich media has also increased. Online classified has fallen from 18% in 2004 to 14% in 2008. Sponsorships have fallen the most from 8% in 2004 to only 2% in 2008. READ THE IAB/PWC REPORT HERE 263k 
Definations are adapted from IAB definations.
"Throughout all this economic shrinkage, the Internet will continue to grow, though at a far more constrained pace. eMarketer projects online ad spending will rise 8.9% in 2009, after an already ratcheted-down rate of 11.3% in 2008 (Emarketer, January 5, 2009)."
Search Advertising is the major type of online advertising. Search ads can be based on the keywords that are typed, contextual advertising or behavioral targeting. The costs of keywords can vary greatly depending on the demand for the term, the nature of the target market and the placement of the ad.
For example, HDTV on AOL cost $2.02 one day in October while the term HDTV-bargain prices cost $.50.
Contextual advertising uses the context of an page, article or story a user is reading and matches it with an associated product or service ad. Someone reading articles on a new cars might receive ads related to BMW, Honda, car dealers or car review books.
Tacoda explains behavioral targeting as the ability to reach desired segments outside of contextually relevant areas. “Behavioral targeting” is a technology that recognizes when web-site visitors are seeking a particular product or service and then serves an ad relevant to their search – at a later date – on another, unrelated page (Oser, 2004 p.4).” For example, a surfer who looks at real estate listings on a newspaper site on a Monday might is served an ad from a real estate agent on Thursday night when the surfer views the Sports section (Oser, 2004). Behavioral targeting uses a surprise effect with precise behavioral segments to work.
Rich media “…allow advertisers to take traditional media assets like video, audio, animation, and photos, and combine them into a multimedia branding experience that streams from an ad server to the client machine (Koegel, 2003).” Rich media technologies include Flash, Unicast, Eyeblaster, EyeWonder, and PointRoll.
Classified advertising is increasingly moving from traditional print newspapers to online formats. Recruitment, real estate and automotive are the major types of classified ads. Monster, Career Builder and Hot Jobs are the top ranked recruitment sites. Traditional newspapers have launched online versions to increase their advertising. Craigslist is an example of a totally online company in the classified online market.
Display ads - Financial services marketers had 29% of the online display ads Web media resented 17% , Retail goods and services had 16% of impressions, telecoms had for 13%, and public services had 6%.
There are two types of email advertising:
1) opt-in or permission based email. For example, permission based email is when a user signs up for a newsletter or other information from a comapny or organization.
2) spam- emails that you do not want and that can be a form of malware.
Radicati Group (August 2008) estimated that 210 billion emails were sent per day in 2008. Over 70% are spam or viruses. The genuine emails are sent by around 1.3 billion email users.
Some new trends in online advertising in the past several years include the increase of social advertising on sites like MySpace and Facebook. Social network advertising is expected to grow to $1.33 billion by 2010.
Another important development is user generated content (UGC). User generated content has appeared on the recent Superbowl, and the increase of video advertising on sites such as YouTube. Another trend is podcast advertising which is expected to grow to $400 million by 2011.
