Research house IDC offers up stats that support what just about everyone on Madison Avenue says is inevitable: the ads will follow the eyeballs online. IDC calculated U.S. Q4 Internet advertising at $7.3 billion, a 28% increase y/y, while full-year Internet advertising grew 27% to $25.5 billion. But only in the midst of a mammoth share-shift from traditional to online media, can that be considered a down quarter. PaidContent laments that the days of 30% increases are “in the past.”
IDC came up with its totals by adding up ad revenues of the top 15 U.S. new media operations, including AOL, Yahoo, FIM, Google, MSN, etc.
Among the surprises: Google lost advertising share in Q4 for the first time in two years. Google dumped 0.5 share points from the previous quarter, and now monopolizes only 23.7% of the Internet ad market. IDC says Google actually had to put up a 40% increase in quarterly ad sales (excluding traffic acquisition costs) just to keep pace with the growing pie.
Another observation: A combined MSFT-YHOO would take a combined 17% of the online advertising marketplace, putting them not terribly close, but at least in the realm, as Google.
One last observation: This is indeed one of the cases where a U.S.-centric view of the world doesn’t do justice to the big picture. As dominant as Google is here, it’s much, much more so in the rest of the world, where it only has real competition in China and Russia.