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Online Ads Contribute $300 Billion To U.S. Economy

Internet employs 3.1 million Americans

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Online advertising contributes $300 billion to the U.S. economy, according to a new study by the Interactive Advertising Bureau.

The ad supported Internet accounts for 2.1 percent of the total U.S. gross domestic product. 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 Internet-related jobs.

The study, commissioned by the IAB was conducted by Harvard Business School professors John Deighton and John Quelch, along with Hamilton Consultants.

"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."

The ad-supported Internet generated an estimated $23.4 billion of Internet advertising in 2008.

Small business has done well because of the Internet. There are more than 20,000 Internet-related small businesses in the U.S 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.

Interactive advertising has significantly reduced what consumers have to pay for access to the Internet and for ecommerce products and services. In addition to its financial contribution to the economy, the Internet has produced large social consequences, providing American society with comprehensive qualitative benefits that include:

Randall Rothenberg
Randall Rothenberg
  • Universal access to an almost unlimited source of information
  • Increased productivity (output per unit of capital or labor, or increased consumer utility at a lower cost)
  • Innovation in business practices, consumer behavior, commerce and media
  • Empowerment of entrepreneurs to start small businesses, find customers and grow
  • Environmental benefits derived from saving natural resources lowering pollution through the reduced use of petroleum-based fuels and paper

"The results of this study confirm the vast influence and driving importance of the ad-supported Internet to the overall economy," said Randall Rothenberg, President and CEO, IAB.

"By understanding the total contribution of the Internet to the U.S. economy, we can more accurately assess the impact of potential legislative changes on the Internet’s operations, particularly the consequences of any actions that would alter ad-supported business models."

Online Ads Contribute $300 Billion To U.S. Economy
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  • http://www.eagleteam.org/tami Tami Murphy

    Online Ad Revenue is increasing dramatically while print media continues to decline. I am part of an entrepreneurial group of business people destined to capture a large percentage of the online shopping market. While the brick & Mortar stores continue to

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