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Study: The Ad-Supported Internet Added $530 Billion to U.S. Economy in 2011 - 3.7% of GDP

Growth Driven By Startups and Small Business

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The ad-supported internet and the ecosystem that supports it contributed $530 billion to the U.S. economy in 2011, according to a study by Harvard Business School researchers that was commissioned by the Interactive Advertising Bureau. This total would account for 3.7% of the country's GDP, up from 2.1% in 2007.

The study found that this ecosystem directly employed about 2 million people last year, up from about 1 million in 2007. The study also found that the ecosystem is also "indirectly" responsible for another 3.1 million jobs at companies that service the businesses at the core.

While much has been said about the lack of growth of ad-supported Internet giants like Yahoo and AOL, the study's authors said growth is happening among small businesses.

Among the fastest growing company types were ad networks, exchanges, analytics firms and digital ad agencies, the study found. 19% of the 2 million direct jobs are the workings of sole proprietorships and small businesses involved in freelance writing, web programming, app development, and the production of crafts and products sold on websites such as Etsy, according to Leora Kornfeld, one of the researchers.

This signals "a return to cottage industry because new kind of efficiencies have been built in," she said.

The IAB last backed a similar study in 2009, which used data from 2007. The methodology used mixes the computation of Census data with estimates of what companies pay their employees.

The full study can be downloaded at http://www.iab.net/economicvalue.

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