Web ads: Worth the expense?

Web surfers my grumble about those ads scattered across their favorite Internet sites, but those same surfers tend to click on the ads, too. A new study shows that

interactive advertising is responsible for $300 billion of economic activity in the U.S.

Yes, consumers do click on those ads and buy the products that are promoted there.

The data for this conclusion comes from a  new study released today by the Interactive Advertising Bureau (IAB).

The study found that the advertising-supported Internet represents 2.1% of the total U.S. 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.

That makes a  total of 3.1 million Americans with good-paying jobs thanks to the interactive ecosystem.

Much is being made recently of the decline in American manufacturing, with special emphasis on the auto industry, that was long responsible for creating both direct and indirect jobs that fueled the country’s economy.

“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, a Harvard Business School prof, 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, another Harvard Business School faculty member  and a co-author of the study.

Other study findings:

• Small businesses have thrived as a result 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.
• Internet-related employment is particularly important to certain areas of the country but exists in every one of the 435 U.S. Congressional Districts. Some Congressional Districts have more than 6,000 Internet-related employees.
• Interactive advertising has substantially reduced what consumers have to pay for access to the Internet and for e-commerce products and services. In addition to its financial contribution to the U.S. economy, the Internet has produced large social consequences as an infrastructure and platform, providing American society comprehensive qualitative benefits that include:
  1. Universal access to an almost unlimited source of information
  2. Increased productivity (output per unit of capital or labor, or increased consumer utility at a lower cost)
  3. Innovation in business practices, consumer behavior, commerce and media
  4. Empowerment of entrepreneurs to start small businesses, find customers and grow
  5. Environmental benefits derived from saving natural resources lowering pollution through the reduced use of petroleum-based fuels and paper