With 1.1 billion users world-wide, the Internet is arguably the best medium for advertising.  Since the early 1990’s, the Internet has grown from several hundred webpages to a staggering multi-billion page medley, effectively opening an enormous amount of “virtual real estate”.

In order to get a rough idea as to how many advertisements are viewed every single day on the Internet, a simulation was created to run through 1.1 Billion iterations (each iteration representing one of the 1.1 Billion users on the Internet) and it was assumed that each user would see between 20 and 500 ads depending on their activity; this simulation ran 10 times and the results averaged out.  The grand total outputted by this simulation was in the vicinity of 500 Billion ads viewed per day world-wide.

How much money does this equate to?  There is really no way to say for sure how much money is generated from all of these ads, however consider this: for the words “consolidate school loans,” Google charges over $50 USD per click!  Even though on average only 1.2% of all ads are clicked, (500B * 0.012)  = 6,000,000,000;  that means that if even half of every ad clicked in the course of just one day returned $1 USD, that would equate to $3 Billion USD per day, $21 Billion USD per week,  or $1.1 TRILLION USD per year world-wide!  This number does not take into account advertising contracts that include a set cost per month for simply appearing on a site and assumes all of the ads pay $1/click.

A more concrete example of the financial potential of Internet advertising is the reported $5.9 Billion USD revenue for the Interactive Advertising Bureau in the third quarter of 2008.  IAB is a group of over 375 leading media companies responsible for 86% of online advertising in the United States (according to IAB.net).

While there are many advertising methods, some the most prevalent are:

• Pop Up/Under Ads
• Banner Ads (long or skyscraper)
• Text Ads (ie. Google AdWords)

There are several pros and cons to Internet advertising:

• [PROS] It is very easy to gather extremely detailed reports about who your ads are reaching and how they view your content; you are therefore able to target the viewers much more effectively.  Internet advertising is typically more cost-effective than physical advertisements when considering operating costs and is almost extremely flexible and modifiable (as opposed to say, a magazine ad).
• [CONS] Many people are still skeptical in regard to the effectiveness of Internet Advertising, whether it be from a lack of understanding or through misinformation.  There is also a tendency for people to either ignore advertisements or use blocking software due to the number of sites that contain malicious code or are populated with close to 75-95% ads.

In the end the PROS greatly outweight the CONS, especially considering the potential gain compared to the minimal investment required.

http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/64544