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By Rick Aristotle Munarriz | More Articles September 29, 2011 | Comments (1)
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There's good news and bad news on the online advertising front.
The welcome news comes from an IAB press release that came out yesterday, indicating that Web-based advertising hit $15 billion during the first half of the year. It represents a sharp 23% increase over the first six months of last year and it's the strongest first-half growth that the industry has seen since 2007.
You should take the showing seriously. IAB -- or Interactive Advertising Bureau -- is actually a collection of hundreds of leading media and technology companies that account for selling 86% of this country's online advertising.
Growth in Web-based sponsorships isn't a surprise. Online advertising is easier to track, readily accountable, and more often than not cheaper as a way to generate leads compared to more traditional media salvos. IAB also reveals that performance-based advertising -- where advertisers don't have to pay unless they generate a lead or a sale -- is now up to 64% of the Internet advertising pie.
Now let's get to the bad news. How did your Web-savvy investments perform during the first half of the year? Now that we know that 23% growth is the average, are the publicly traded dot-com heavies gaining or losing market share?
So where is the real growth outside of Google's pace car? Social networking is a key driver. Facebook is still private, though white-collar rival LinkedIn (NYSE: LNKD ) saw its marketing solutions revenue more than double during the first half of the year.
The takeaway here is that online advertising is a booming business in the United States, but investors need to make sure that they're buying companies that really are on the right bandwagon.
If you want to track these online advertising specialists to see how they hold up, consider adding them to My Watchlist.
The Motley Fool owns shares of Google and Yahoo!. Motley Fool newsletter services have recommended buying shares of Yahoo! and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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