Commentary by Bruce Kellison
Google unveiled its Texas economic impact numbers today, claiming $3.2 billion in “economic value” for its advertisers and website publishers who used its Search, AdSense, and Adwords products in 2009. While impressive, the number certainly would be more meaningful if it was net of the economic impact from marketing dollars that its 104,000 Texas clients used to spend on traditional advertising channels (TV, radio print, billboards, etc.) but switched to spending with Google. From the economy’s perspective, the incremental effect of new sales generated by marketing dollars spent using Google, minus the effect of sales from traditional marketing, is what is key when discussing economic impact. That said, if it is true that digital advertising represents only 8-13% of all advertising dollars spent by firms, this impact number is only going to grow in the coming years as more and more people and firms use the internet to research products and buy on-line. Just look at how mightily newspapers and TV networks are struggling to retain readers and viewers in a decentralized entertainment marketplace.