Internet advertising has recaptured the imagination of marketers.
Yet recent McKinsey research (registration required) finds that supply bottlenecks could limit the pace of online ad growth and drive prices higher.
There are not enough ad agencies that can manage both traditional and digital campaigns which could further slow the shift in spending to online ads. Moreover there are not enough digital marketing professionals to go around following the many people fired after the first dot com bust. There is already a severe shortage and wage inflation and poaching are increasingly problematic in our agency and otheres like it.
Over time, inventory levels will increase, and marketers will be able to shift larger portions of their budgets online. Until then, marketers will have to manage a broad and rapidly changing array of media vehicles.
Spending for online ads reached $12.5 billion in the United States in 2005, up from $10 billion the previous year. By contrast, spending for traditional ads totaled $220 billion in 2005.
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