2004 Online Ad Spend: Search Is Hot, But Contextual Pollution Of Figures Continues

As Gary mentioned earlier, online ad spending figures for all of 2004 were recently released by the IAB. What do they show specifically for search? Up, up, up, no matter
how you want to slice it, though mixing in spending on contextual ads doesn’t give a completely clear figure.

  • Search & Contextual Is Top Category, Again: For another year, search (which includes contextual ads, according to the study) had a far bigger slice of ad spend than
    any other category, gaining a 40 percent share of all revenue. Display ads were a distant second at 19 percent, though if you buy into the "All Display Advertising"
    super-category the IAB also provides, then it rises to 39 percent of all spend.
  • Search & Contextual Worth Nearly $4 Billion: In terms of actual revenue, search was estimated to have earned $3.85 billion in ad spending.
  • Search & Contextual Had Biggest Spending Rise: Search revenues rose more in dollar amounts than any other category, climbing by $1.3 billion from $2.54 billion in
    2003 to the aforementioned $3.85 billion in 2004. That’s a 51 percent rise.
  • Search & Contexual Still Below Other Offline Spending: Despite being worth $4 billion, the report shows that search spending is still well below many other types of
    media spending. Direct mail tops the list, being worth $50 billion, followed by newspapers at $46 billion and broadcast TV at $33.5 billion. The list ends with outdoor
    advertising at $6 billion. But with more growth, search may push ahead.

The IAB Internet Advertising Revenue Report is available (PDF format) to anyone and has plenty of charts and details.
Another nice chart is over in the press release about the report. I used those figures to sort the data differently and
put search in better perspective, which you’ll in the version of this post for Search
Engine Watch members.

That extended post also looks in depth at the giant flaw with report, the failure to
break out contextual ads from search. They aren’t the same as search, as I explain — and counting them as search pollutes the data.

I also look at how the recent Google CPM pricing for contextual ads is finally generating more awareness
that contextual isn’t search, as well as what I’ve long written, that Google and Yahoo aren’t
tech companies, aren’t search companies but are ad or media companies.

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