With the rapid growth of the Internet and its audience advertisers now have a new medium at their disposal. The placement of the first banner ads in 1994 marks the birth of Internet advertising. Although the advertising industry at first hesitated to adopt the new medium, two facts brushed away their doubts:
Migrating Television Audiences: The increased use of the Internet led people to redistribute their time budget. Whereas some cut down on eating and sleeping, more than a third reduced watching television and instead uses the WWW.
Interesting Internet Demographics: While methodologies and approaches of research organizations studying the demographic composition of the Internet vary, the findings are relatively consistent: Internet users are young, well educated and earn high incomes.
Considering those findings, the Internet in the first place seems to become inevitable to be included in media planning, as part of the audience shifts from TV to the WWW, and secondly, because demographics of the Internet user population are irresistible for marketers.
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Media systems (especially broadcasting) can be classified in two different types:
Public Media Systems: Government control over broadcasting through ownership, regulation, and partial funding of public broadcasting services.
Private Media System: Ownership and control lies in the hands of private companies and shareholders.
Both systems can exist in various forms, according to the degree of control by governments and private companies, with mixed systems (public and private) as the third main kind.
Whereas public media systems are usually at least partially funded by governments, private broadcasting solely relies on advertising revenue. Still also public media systems cannot exclude advertising as a source of revenue. Therefore both types are to a certain degree dependent on money coming in by advertisers.
And this implies consequences on the content provided by the media. As the attraction of advertisers becomes critically important, interests of the advertising industry frequently play a dominant role concerning the structure of content and the creation of environments favorable for advertising goods and services within the media becomes more and more common.
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Although Internet advertising only really started in 1994, revenues showed a steady and fast growth. In 1997 US$ 906.5 million were spent on on-line advertising. Compared with advertising revenue for the television industry in equivalent dollars for its third year, the Internet was slightly ahead, at US$ 907 million compared to television's US$ 834 million. 1998 on-line advertising grew by 112 percent to US$ 1.92 billion in revenues, and is on track to hit US$ 4 billion in 1999, which would put Internet advertising at about 2 percent of the U.S. ad market.
Table: Spending on On-Line Advertising by Category
(first quarter 1999)
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Table: Types of On-Line Advertising
(first quarter 1999)
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Source: Internet Advertising Bureau (IAB).
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The advertising industry has always relied on media to transport their messages and disseminate them to the public. Depending on the product or service advertised and the audience targeted different media are used. Besides cinema and outdoor advertising (posters etc.) the huge majority of ads is placed within the classical media landscape, which includes TV, newspapers, magazines and radio.
Whereas in most cases only a relatively small fraction of advertising budgets is spent on cinema, outdoor and radio advertising, newspapers, magazines and TV account for more than two thirds of the money spent on ads. Still with the growing popularity of new media advertisers and marketers have recently also discovered digital networks and especially the Internet for their purposes.
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