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Internet Advertising Boom Continues - Rough Waters for Big Lead Generators?

Wednesday, November 14th, 2007 | Link | Spread The Word!


So internet spending is still going gangbusters, including 26% rise in spending year to date…

NEW YORK (Reuters) - U.S. Internet advertising revenue rose 25 percent in the third quarter to about $5.2 billion, a new record, according to data released on Monday.

The report by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP showed online advertising revenue has hit new highs in each of the first three quarters of 2007.

Revenue for the first nine months of 2007 totaled $15.2 billion, up nearly 26 percent from the $12.1 billion recorded during the first nine months of 2006, the report said.

“The continued robust growth of the industry indicates that marketers increasingly understand and appreciate the benefits of interactive advertising,” IAB Chief Executive Randall Rothenberg said in a statement. “Marketers large and small have come to accept digital media as the fulcrum of any marketing strategy.” Click here to read the article.

This article caught our attention as internet advertising is how a lot of our partners do their marketing.  As ad spending on the internet rises, the costs of internet advertising real estate will also rise, although not necessarily in proportion.  As spending and competition for spots on wide-net popular internet sites increases, the cost of doing business for internet lead generation companies is increasing steadily, or at least for those who are dependent on banner ad and CPC expenditure.

Companies that NEED to do internet advertising are running into an ugly predicament:  more and more big companies, with large ad budgets, increasingly WANT to do more advertising.   While the internet maintains some advantages for smaller companies (hyper-targeted ads, low minimum expenditure), the prime mainstream ad spots will be increasingly eaten up by the big boys of the ad world; Toyota, GM, Ford, Nike, Honda, Apple, Microsoft, Fox, and so on.   This movement will push lead generation companies to be increasingly niche or increasingly large, or both.   Either way, it will challenge and push the industry to innovate, or else.

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  1. Before coming to Leads360 I worked for a lead generator. For a time, I was in a hybrid sales / busdev role where part of my day was spent working with publishers looking for opportunities to put our offers on their networks. This was back in 2005. We really started to see this happening and came up against it almost daily. The billion dollar conglomerates with advertising money hemmoraging out of every crack were buying up the primo spots. Ford, everywhere. Toyota, everywhere. We had to get creative with how we targeted media, and it was very challenging. The more targeted your media spots are, the more susceptible you are to damage with even the smallest market change. This was something that we certainly suffered from as we moved into 2006 and rates started to increase more steadily.

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