Blog Post

Highlights Of 2011: The Year In Advertising, By The Numbers

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

This is the fourth in a series of posts over this week that looks at the most significant developments of this year in the sectors that we cover, from publishing to mobile to advertising.

Despite the economic slowdown, digital advertising and marketing revenues grew in 2011 and remained a cornerstone of many digital content strategies. Here are five numbers charting their progress this past year.

$1 billion: 2011 was the first year that revenues from mobile advertising in the U.S. passed the $1 billion mark, according to researchers at eMarketer. Growth is coming from increased confidence in the medium, but also because advertisers are getting better scale for their investment: some 38 percent of U.S. consumers use a smartphone and access the mobile internet at least one time each month. The $1 billion figure includes display, search and messaging-based advertising, with search ads making up the biggest portion, at $349 million. But while $1 billion is a milestone of sorts, that number is still small when you compare it to the bigger advertising pie…

$464 billion: This is the total number of ad dollars spent in 2011, according to Publicis’ ZenithOptimedia. That’s a 3.5 percent rise compared to ad spend in 2010, and shows that ads are remaining somewhat resilient despite the economic slowdown in the U.S. and Europe and worries about the larger debt crisis. Online ad growth is actually outpacing that: it rose 12 percent in 2011, and made up 15.9 percent, or $73.8 billion, of overall ad spend. As with mobile ads, search ads made up the biggest share of online ads (25.6 percent), with display (22.6 percent) and classified (4.7 percent) following.

3: The number of internet portals needed to work together to match the weight and heft of Google (NSDQ: GOOG) or Facebook when it comes to competing in display advertising. In September, AOL (NYSE: AOL), Microsoft (NSDQ: MSFT) and Yahoo (NSDQ: YHOO) officially joined forces in an ad sales alliance: each will continue to pursue their own ad businesses, but also sell each other’s unsold inventory. Although they didn’t say it, the move looked defensive: all three make significant ad revenue from display ads, an area where both Facebook and Google are increasingly moving, beyond their respective bases of social and search advertising. The display market was worth $12.33 billion in the U.S., says eMarketer. But display ads cannot save everything…

4.5 percent: The percentage of AOL owned by Starboard Value, which this week sent a damning letter to AOL’s CEO, Tim Armstrong, outlining what it believes have been strategic mistakes made by Armstrong and AOL’s board. Among the problems, Starboard believes AOL has put too much money into trying to save its display business: the advertising that AOL sells against its own properties (which include TechCrunch, Huffington Post, Engadget and many others) is not covering the cost of running them. It calculates that AOL could be losing more than $500 million per year on this business. Other unprofitable areas that it names in its letter include the local-content business Patch, which also hinges on an advertising-based business model. AOL’s response? We’re still in turnaround mode.

$700 million: The amount of money raised by Groupon when it made its initial public offering in November. The daily deal — in which direct marketing meets online retail — has proven to be one of the more popular formats for promoting businesses and brands this year, spawning a million Groupon (NSDQ: GRPN) competitors and outright clones, even as Groupon’s own stock seems to have hit a few rocks.

Read the rest of the posts in our Highlights of 2011 archives.