Online delivers over $500bn of GDP in US

02 October 2012

NEW YORK: Over $500bn of US gross domestic product is attributable to the internet "ecosystem" supported by advertising, a new study has revealed.

According to the Interactive Advertising Bureau and the Harvard University Business School, the ad-supported web "ecosystem" was responsible – either directly or indirectly – for 5.1m jobs in America in 2011, together contributing $530bn to the economy.

This total, which came in at $300bn in 2007, looked at employment at relevant "consumer-facing" firms such as ad agencies, networks and exchanges, as well as at service providers like Google, Facebook and Twitter.

It also included certain software developers, providers of website hosting, video conferencing and similar tools, plus IT consultants and analysts, and the hardware, connectivity and transmission sectors.

A second, more sweeping, scenario assessing the "exports" that went "beyond the borders" of the online economy – like advertising services, ecommerce and payments to internet services providers – argued they had a combined value of $862bn.

Within this, the analysis afforded search, display, classified, mobile, lead generation and email ad services a net worth of $32bn. Retail revenues stood at $212bn, and the cost of web access reached $170bn.

Under a third methodology, the study valued each hour individuals spent online at work based on the average wage of non-management workers outside the agricultural sector, and arrived at a figure of $19.07.

When combined with leisure time spent online, which is harder to place a value on, it attributed the overall "time spent online" by internet users a total net worth of $833bn.

"The substantial economic impact of the internet - through its evolution and dynamism - has been borne out by this study," said Professor John Deighton, one of the co-authors of the report.

"Once accessed only from large desktop machines that connected the office or home to the world, the internet, thanks to mobile phones and tablets, has become ubiquitous."

"And looking to the future, opportunities abound for technological development and new user experiences that build on the features of constant connectivity and participation."

Data sourced from Interactive Advertising Bureau; additional content by Warc staff