Web 2.0 Advertising Revenues Rising

When the late 1990s dotcom bubble finally burst, many people were left scratching their heads wondering if the internet was really a viable profit channel. Website developers sought work in different fields and advertisers turned away from the internet as a promising advertising medium.

But less than a decade later, things have changes. After the slump in internet advertising the last five years, spending has steadily been on the increase. In fact, internet advertising revenues are rising at astronomical rates.

Since online advertising revenue hit a low in 2002, it has been recovering nicely as advertisers' confidence has recovered. But web advertising spending remains in the shadows of traditional advertising media such as television and print.

However, the winds of change are altering that picture. The Web 2.0 revolution has steadily refocused advertisers' attention on the potential of social networking to reach large groups as never before.

Web 2.0 allows users to interact with websites and make content contributions. As one popular blogger stated, social media allows individuals to "stop yelling at the computer and actually be heard."

Google was a pioneer of Web 2.0 technology but other companies' fame has overshadowed its first breakthroughs. What really has caught advertisers' eyes is the popularity of social networking sites like FaceBook and MySpace, which have quickly grown to be among the biggest websites in the world.

There are also underlying trends that are causing advertisers to look to the internet again. One major factor is that young people in the United States now spend far more time in front of the computer than the television. Consumers have also become advertising blind. Blatant advertising is usually ignored, turned off, or cursed. Therefore, advertisers are looking for new and innovative ways to reach their audiences.

Web 2.0 advertising allows businesses to reach a certain audience, whether in terms of demographics or gender, it at least ensures an advertiser's message is reaching the right people. Target niche groups also cuts costs — costs that would have otherwise been spent reaching the wrong audience.

There is little doubt that Web 2.0 advertising revenues will continue to grow. And as demand increases, the cost for advertisers is also likely to increase. However, costs remain competitive for now, so don't overlook this advertising alternative.

 

Written by: David C Skul - CEO

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