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Ad-Supported Internet Puts Oomph in Economy

internet economy . / Credit: Internet Image via Shutterstock

As the rest of the economy is struggling, advertising-supported websites are thriving. New research estimates that Internet sites supported by paid advertising employ more than 5 million people and contribute $530 billion to the United States economy.  

Both those numbers have more than doubled in the last four years. The $530 billion added to the economy accounts for 3.7 percent of the U.S. gross domestic product (GDP), which is up from the 2.1 percent of the GDP it represented in 2007.

The majority (72 percent) of these jobs are with companies headquartered in just nine states, with  New York and California leading the way. Washington, Massachusetts and Illinois rounded out the top five states for firms and employees.        

"One of the most striking findings of this report is that growth was fast in the consumer-facing layer, but that it was even faster in the less glamorous infrastructure layer that supports the high-profile brand name sites and services,” said John Deighton, a professor at Harvard Business School who directed the research. “Jobs grew fastest in digital advertising agencies, ad networks, ad exchanges, customer analytics firms and listening platforms. The engine of growth was not just consumer-facing companies like Facebook, Twitter and YouTube, but also firms that used the data spun off by them.”

Small firms were also responsible for a great deal of growth in the digital space. Sole proprietors and smaller firms were responsible for creating 375,000 full-time employees. An additional 3.1 million jobs were created indirectly in the infrastructure, support and consumer services fields by firms of all sizes.  

“The rapid growth of the ad-supported internet has become a major driver in the U.S. economy,” said Randall Rothenberg, president and CEO of the Interactive Advertising Bureau (IAB), which commissioned the research. “All this, despite a challenging economic climate. With encouragement from regulators and legislators in Washington, D.C., and other world capitals, there is no doubt that the interactive marketplace will bring an even greater number of jobs into the fold — not only in America, but across the globe — providing strong economic value in the years to come.”

The research was a part of the "Economic Value of the Advertising-Supported Internet Ecosystem." Deighton and Leora D. Kornfeld, a research associate at Harvard Business School, conducted the research for the IAB. Google, 24/7 Media and ValueClick all helped to underwrite the cost of the research. 

Follow David Mielach on Twitter @D_M89 or BusinessNewsDaily @bndarticles. We're also on Facebook & Google+.  

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