Blogs and Advertising Revenue: Prospects are looking up for bloggers

In the Wall Street Journal article Top Web Sites Build Up Ad Backlog, Raise Rates (subscription required) reporters Julia Angwin and Kevin J. Delaney provide some encouraging numbers for those bloggers who seek advertising revenue.

It appears Web ad space is a very hot commodity these days and many of the high traffic sites are sold out of ad inventory. The chief media revenue officer at MSN says it best: “We have a supply issue”. This means good things for the smaller sites that have space to sell.

The biggest 50 Web companies are attracting 96% of the ad spending, according to PricewaterhouseCoopers. Most goes to the top four portals — Yahoo, Google, AOL and MSN.

Still, the rising tide of ad dollars is lifting some smaller boats. The shortage of premium spots is driving advertisers toward smaller targeted Web sites that capture niche audiences and even into what is known as “remnant inventory,” or otherwise unwanted spots across a wide array of Web sites.

Prices for remnant advertising increased about 3% in the third quarter from the second quarter, according to a survey of media buyers by Deutsche Bank analyst Jeetil Patel. Unlike premium sites, remnant advertisers have no shortage of space available.

The growth of the Web advertising market has been impressive lately. U.S. advertising spending online increased by 26% to $5.8 billion in the In the first half of 2005. In addition, the prospects for growth are encouraging. Online ad revenue accounted for only 3.7% of total U.S. ad spending last year.