Icebergs are COOL!!

I was a little surprised when I opened the Australian Financial Review yesterday to see my beautiful visage peering out from the centre of Page 48. I was asked by the AFR for my opinions on the recently released internet advertising statistics from the Interactive Advertising Bureau and had a chance to share some thoughts about how those particular statistics really only show the tip of the real digital services iceberg. I was surprised when the journalist (Julian Bajkowski - thanks for inviting us to participate!) asked me if it would be Ok to include a photo .... I didn't realise that I would be permanently raising the aesthetic bar of the AFR IT Section!!*

There is a lot more to explore on this theme - yes internet advertising is growing at an amazing rate (54% for the year to more than $1.2 Billion in Australia alone!) but the impact on business, investment and digital services certainly doesn't stop there.

Internet Advertising measures (by my understanding) the amount of money spent on buying advertising space on online properties. These might be banner adds, iFrames, search terms, paid blogs (yes - some people DO get paid to write their blogs on behalf of advertisiers!! Not me though....) and so on. What it doesn't seem to include is the commerce that occurs around the final act of placing the ad.

Every online advertisement needs something to advertise - by definition interactive ads allow end users to interact with the offer being made. They click on the ad to go to a site, somewhere, that expands on the offer, allows them to register interest / research / buy and that gathers information about the whole chain of events. All of these things require investment - there is creative effort, execution effort, intellectual property, technology, measurement and analysis and more.

All of this goes to the fact that the interactive advertising statistics are just the tip of the iceberg. I have been asked a few times what I think this Digital Services industry multiplier might be - how much of the total investment does the actual "ad buying" represent.

In the newspaper I was quoted as saying that this might be a 2x effect, that the ad buying might be half of the total investment and today we have had a lot of debate amongst some colleagues about this fact. I am getting convinced that the multplier might be much more than that.

I will do some more research on this - I think that the market generally underestimates how much commerce is occuring as a result of the Digital Services transformation that is going on right now. And besides, if we are out there changing the world, it is important to have a sense of by just how much we are doing this.

*My mum thought I looked pretty good anyway....