Is online advertising SOLD OUT?

A recent McKinsey report seems to suggest that we are reaching the maximum utilization of all online advertising. And, we could all be in for a spike in prices. Now that’s a Buzz kill!

The McKinsey research combined quantitative analysis with more than 50 interviews with leading digital advertisers, ad agencies, and media companies. The study compared both current and projected U.S. ad spending for online vehicles—including video, banners, and paid search ads tied to keywords that consumers enter in search engines—with the maximum amount of advertising such vehicles could theoretically absorb today.

The analysis revealed that use of the most attractive digital ad vehicles is already quite high. Plus, without large increases in online advertising “inventory,” demand could outstrip supply over the next 24 months (see table). While prices are a closely guarded secret, the MicKinsey interviews indicate that prices are already rising and likely to jump further as advertisers bump up against constrained supply.

I find it hard to believe we’ve reached the limits of the online advertising space so early in the game. There’s a good chance that blogs, wikis and other forms of new media could fuel continued growth. What’s your take on this?

2 comments to Is online advertising SOLD OUT?

  • Joan Damico

    I agree with you, Paul. I think it’s being influenced to some degree by a lag in e-marketing know-how. Blogs, podcasts and RSS present many new advertising opportunities, but many B2B marketers are either unaware or simply not certain how to access the inventory.

  • Paul Dunay

    One would think the inventory would be growing with all the Consumer Generated Media (CGM) – I guess there is no way to predict that

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