• MarketWatch, Friday, June 8, 2007 11 AM

The press often says the ad industry is a dying business operating in crisis mode. We at MediaPost believe there's never been a more exciting time to be in this business, although we've understand that digital upheaval is forcing ad agencies to adapt their strategy to a phenomenon they don't completely understand. But advertising is far from dead--rather, it's moving ahead, thanks to the latest round of Web acquisitions.

As ad dollars shift online--at a growth rate seven times faster than other media--an interesting thing has occurred (in the U.S., anyway): oligopoly. In this most democratic of mediums, Google, Yahoo, AOL and MSN captured 85$ of spending in 2006, while the top 10 Web sites attracted 99% of gross ad dollars. Elsewhere across the globe, the balance of power is more balanced. Add DoubleClick to Google and aQuantive to Microsoft and not only do you see the overall pie getting bigger, but also their market-dominating share of industry revenues.

Why? Because Fortune 500 companies spent just 6% of their collective ad budgets on the Internet last year. Consumers are spending one-third of their time with interactive media. But firms like P&G will soon stop talking so much about change and start putting that into practice, as the latest round of industry acquisitions makes it easier and more efficient for these big companies to shift spending to the Web.

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