Interactive advertising generates busines worth $300 billion: IAB

12 Jun 2009

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Interactive advertising has been identified as responsible for $300 billion worth of economic activity in the US, according to a new study by the Interactive Advertising Bureau (IAB).

The advertising-supported internet businesses represents 2.1 per cent of the total US gross domestic product (GDP).

It directly employs more than 1.2 million Americans with above-average wages in jobs that did not exist two decades ago, and another 1.9 million people work to support those with directly Internet-related jobs. A total of 3.1 million Americans are employed thanks to the interactive ecosystem.

These are the key findings of the first-ever research to analyse the economic importance, as well as the social benefits, of the Internet.

The study, commissioned by the IAB was produced by Harvard Business School professors John Deighton and John Quelch, along with Cambridge, MA-based Hamilton Consultants. It was designed to provide an impartial and comprehensive review of the entire Internet economy and answer questions about its size, what comprises it, and the economic and social benefits Americans derive from it.

''This is the first time anyone has undertaken a comprehensive analysis of the size and scope of the Internet economy and measurement of its economic and social benefits,'' said Professor Deighton, the Harold M. Brierley professor of business administration at Harvard Business School, and an author of the study.

''I am convinced the results of this study will prove useful for business leaders, legislators and the educational community.''

''This study underscores that the Internet ecosystem is generating an increasing level of economic activity in every corner of the nation,'' said Professor Quelch, the Lincoln Filene professor of business administration at Harvard Business School and a co-author of the study.

The study looks at the entire interactive marketing ecosystem, which includes:

The ad-supported internet, narrowly defined as the content and usage supported by an estimated $23.4 billion of Internet advertising in 2008

Among some of the other important findings:

Small businesses have thrived as a result of the Internet:

There are more than 20,000 Internet-related small businesses in the US that provide a variety of services such as web hosting, ISP services, web design, publishing, and Internet-based software consulting. Many of these businesses have 10 or fewer employees.

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