Friday, April 28, 2006

Sequoia's Kvamme: Online Advertising to Blow Away Everyone's Expectations

Sequoia's Kvamme: Online Advertising to Blow Away Everyone's Expectations

In his keynote address at this week's Ad:Tech San Francisco tradeshow, Sequoia Capital Partner Mark Kvamme predicted that internet advertising would be a $35 billion market in 2008, nearly double the $18 billion predicted by the Internet Advertising Bureau, writes ClickZ's Rebecca Lieb. At the heart of his prediction is his belief that advertisers will see the value in online advertising and siphon dollars from TV.

Kvamme said TV reaches 32 percent of the population, but 38 percent of ad dollars are allocated to it; the web, meanwhile, reaches 32 percent of people but internet advertising captures a mere five percent of ad dollars. TV CPMs are around $64, contrasted to $10-30 online.

Other speakers said RFPs are burgeoning, and that most of that new business is from brand advertisers, particularly consumer packaged goods companies. Agencies are also saying they're dealing with a new client demographic: senior management and CMOs.

This year's Ad:Tech has moved to larger convention center quarters to accommodate some 9,000 attendees and 500 exhibitors, writes ClickZ. But, at the same time, notably absent are MSN, AOL and Yahoo; though Google is present, it is maintaining a low profile. (The official Ad:Tech blog provides a flavor of goings-on - and various shenanigans - at the tradeshow, which ends today.)

Kvamme is also quoted as saying increasing broadband penetration in the U.S. market will boost online commerce. He pointed out that 30 percent of all Korean retail transactions occur online thanks to that country's 68 percent broadband penetration.


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