Now here’s a picture that paints a thousand words - so much so there is no accompanying article.  Published by The Guardian on 18th April, this graph ostensibly shows the growth of Google as a advertising revenue magnet.  But the story does not stop there.  This chart is like one of those 3D Magic Eye drawings popular in the early nineties where the more you focus on it, the more you see.

Firstly, the enormous rise in internet revenue has not caused an equal and opposite drop-off from other media.  This contradicts the Chicken Littles forecasting the end of traditional media revenue streams - at least for the time being.  So where is this revenue coming from?  Traditional advertising budgets have not increased by this amount in the UK.  Certainly there are large companies playing in this space - but not close to the £3bn level.  This leaves the proposition that Google and internet advertising have managed to create a new and incremental revenue stream from new sources. 

Small offices and businesses, and new digital pureplay businesses are most readily positioned to use Google and online marketing to their benefit, and this is where the money is coming from.  An Australian-based colleague recounts the example of a friend of his who runs a gourmet food delivery company and whose marketing spend is solely focused online to the tune of $11,000 per month.  The result is a geo-targeted, search-friendly campaign that appeals to neighbourhood homes - and only neighbourhood homes - in a more effective way than the private ads in free local newspapers.

The second point of interest is that without Google, the angle of the growth line for other Internet advertising would be far shallower - a much more realistic 10-15% growth.  I have seen many a new media executive take the overall internet growth trend line as a basis for their business forecasting without filtering out search revenues in general and Google specifically.  Needless to say, trying to deliver results on a 30% growth rate would be applicable to start-ups (and Google) but not for existing new media businesses or portals.

Using this chart as a basis for international forward projections in general - and the Australian market specifically - the picture tells a story with the confidence of a time-traveller.  The television advertising market is today worth $3bn.  The total internet advertising market in Australia is currently at approximately $1.3bn, and has experienced growth that matches the growth on the chart.  While there are different methods between the UK and Australia for measuring traditional media advertising, the trend lines are similar between the two countries.  This positions Australia at the end of 2005 in comparison to the UK.  On the trajectory in the chart, and if the line continues, total internet revenue in Australia will surpass television advertising in 2010. 

And finally, what might throw this line off?  If the global markets exert a squeeze on advertising budgets, across all sizes of businesses, which media will feel the pain?  Judging by this chart, and the apportioning of budgets across large companies and small companies between old and new media, the answer will depend on which size of business pulls back first.  If large business pulls in the reins before small businesses, as they usually do, then it is likely that old media will see a reduction in media spend budgets first.  If small business pulls back, then internet spends might be affected more. 

Forrester’s Josh Bernoff has put forward a partisan case for retaining and even increasing new media spends on social networking sites during a recession.  Accountability is a good argument for reducing the risk of the marketing budget, but the business development pipeline still needs to be expanded in a broad sense, something that broad-reach above-the-line media still excel at.

As with horoscopes, these charts can be read and interpreted in different ways.  Different people have different experiences that they overlay which change the interpretation.  But when the actual data of different media revenues are compared directly over a decent period of time, the trend lines become valuable guides into a fast-moving future.