The Internet is already a significant advertising medium. With $3.8 billion in ad spending—as measured by Competitive Media Reports—in the first nine months of 2002, it is already larger than outdoor media (like billboards) and has attracted nearly two-thirds as many dollars as radio.

And we have not seen anything yet.

In the next 1,000 days the Internet will attract more advertising dollars than radio, newspapers, and consumer magazines, lagging behind only television, albeit by a large margin. It is likely to significantly impact the future of television as Internet Protocol technology spreads to set-top boxes and will increasingly be used seamlessly with television to create new marketing media and opportunities.

All this from a sad-sack medium that has been associated in the past two years with hype, disasters, bogus operators, financial meltdowns, negative press, and greed, and whose biggest fans are still mired in a blend of depression and regret.

IP-based media will become a significant part of the marketing and media mix because it has something more powerful going for it than the hopes and boasts of its believers.

It empowers people.
It improves more rapidly than any other medium.
It is taking over the guts of other electronic media.

Internet-based media is the first addictive medium since television. There is a strong correlation between the number of years one has been using the Internet and the variety of tasks one does and the amount of time one spends with the medium. Today the average user is online for eight to nine hours a week, more than double that of three years ago. Average time spent using the Internet is already twice as long as time spent with magazines or newspapers. A common theme behind this increase in usage is that people feel empowered via increased convenience, control, and communication provided.

AOL and MSN introduced the 8.0 versions of each service, and we are on the sixth release of Netscape and IE browsers. No other medium is evolving so rapidly. With the recent escalation in broadbrand uptake (100,000 new homes a week), we are seeing the medium being used for entertainment and not just communication and information. A harbinger of things to come for online advertising can be seen at ESPN.com, where 80 percent of users have broadband connections and where the property has built a host of new opportunities for marketers.

This rapid Darwinian improvement of IP-based media also has impacted advertising. While "click through"  and other "Blodget IPO" measures of inconsequence have declined, the ability of online marketing to attain a variety of objectives has improved significantly when implemented correctly (and often in tandem with other media). A variety of new products from paid search, to surround sessions, to larger ad units, to richer media have led to enhanced results for advertisers. The Online Publishers Association recently announced that many members are seeing 30-plus percent increases in online spending.

Increasingly, IP-based media is influencing and oftentaking over the guts of all electronic media and advertising. Clients are beginning to use online advertising in tandem with offline, not only as a complement to their offline dollars but also to learn how to better measure and target the rest of their advertising. As many worry about the inevitable spread of personal video recorders, they are realizing that Internet advertising will allow them to learn about ways to better measure, better innovate, and better align with consumer passions when the 30-second commercial grows less important.

For these reasons not only will internet advertising be a significant medium but one that grow more impactful, important, and influential.