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Ad Group Says Internet Accounts For 5.1M US Jobs, 3.7% of GDP 73

Posted by timothy
from the exact-figures-are-124.987-percent-accurate dept.
lpress writes "A Harvard Business School study sponsored by the Interactive Advertising Bureau shows that the ad-supported Internet is responsible for 5.1 million jobs in the U.S. — two million direct and 3.1 million indirect. They report that the Internet accounted for 3.7% of 2011 GDP. The research, development and procurement that launched the Internet back in the 1970s and 1980s cost the US taxpayers $124.5 million at the time — not a bad investment!" Your calculations may vary.
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Ad Group Says Internet Accounts For 5.1M US Jobs, 3.7% of GDP

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  • by Anonymous Coward

    So is this meant to be some sympathy piece for why we should all feel guilty for ad-blocking ala the anti-piracy ads of the MPAA? Sorry, but you ad people are sleazy scumbags who can all be run off the cliff for all I care.

    • by bonehead (6382)

      Sorry, but you ad people are sleazy scumbags who can all be run off the cliff for all I care.

      Not all ad people. I do use ad-blocking software on the Internet, but I do like to browse through the flyers in the Sunday paper to see what's on sale. And I'm not terribly bothered by advertising that slips through my ad-blocks. Ads aren't entirely bad as long as I am able to check them out when it's convenient for me.

      Now sales people, on the other hand. Screw them. Why can't I just walk into Best Buy and look over their selection of small televisions. No, I don't "have any questions". And if I did,

  • Adblock (Score:5, Funny)

    by Ironchew (1069966) on Saturday October 06, 2012 @01:13PM (#41569365)

    So does that mean my Adblock Plus/NoScript combo is killing jobs?

    If so, I'm too satisfied with my ad-free internet to really give a damn.

    • So does that mean my Adblock Plus/NoScript combo is killing jobs?

      Not when the study includes sites like Amazon and Craiglist.

    • by Anonymous Coward

      Yes, you're a bad person and you should feel bad. If you don't like ad-supported sites, don't browse them. Instead, you're stealing the services by refusing to pay for them.

    • You wouldn't download a car, would you? Well, that's what you're doing when you use adblock on the internet.

  • by innocent_white_lamb (151825) on Saturday October 06, 2012 @01:16PM (#41569401)

    So the employment is much larger than the movie and music industries.

    And the video game industry is also larger than movies and music.

    Why is the tail always doing the barking for the dog again?

    • by Hentes (2461350)

      The IT industry is divided, while the movie and music industries form a strong cartel.

    • Because the movie and music industries are controlled by huge multinational megacorps. Sure the individual music or movie divisions themselves might be smaller relatively but the parent corps of Disney, Vivendi, Viacom, Sony, News Corp, Time Warner and Comcast have enormous of amount of money and power at their disposal. Anyone of which completely eclipses the revenue and employee count of even the largest video game companies like Activision/Blizzard, EA, etc. The video game companies are peanuts compar

    • by theCoder (23772)

      It's not the music and movie industries that control the debate (if there were one). Sure, they try, but it is the various news media programs out there which tell everyone about the "piracy problem". The news programs which only give one side, that copyright is a great thing and that pirates are stealing money out of starving artists hands.

      Of course, the news media themselves have a vested interest in stronger copyright, since they directly benefit from that copyright. Whether MSNBC, the New York Times,

  • This is sad (Score:5, Insightful)

    by DaMattster (977781) on Saturday October 06, 2012 @01:27PM (#41569501)
    This is just indicative of how our society is going downhill. America cannot be viable long term on a service-based economy. We must do more manufacturing. Those that own the means of production have the ability to rapidly innovate. If we don't stem the tide of partisan corruption and sending manufacturing overseas, the United States is going to go the way of Rome and our future will be studying us in textbooks much like we study Ancient Rome.
    • So who is going to be the first emperor of the U.S.?

    • Movies. Microcode. Pizza Delivery.

      (Notice that, in this particular utopian view, the service industry is in third place.)

    • Jobs will go where the labor cost is lower. Not complicated.

      • Obviously manufacturing companies aren't using enough unpaid interns. Now that many college graduates have no hope of ever paying back their loans, a labor commitment should be added to the contract in lieu of interest.
        • Now that many college graduates have no hope of ever paying back their loans
           
          Most of of us have more interesting problems to worry about than a bunch of brats who borrowed and partied away $100K while getting a useless degree in fine arts or something and now don't want to pay it back and their parents who neglected to tell them that the world does not owe them a living.

          • by shmlco (594907)

            Wow. Agenda much? It must be terrible living in fear that someone, somewhere, just might be getting something to which they might not be entitled.

            As a matter of fact, this fits in with my theory that the neo-con position on sex is based primary on the fear that someone else might be getting more sex than they're getting... and actually enjoying it.

          • by tehcyder (746570)

            Now that many college graduates have no hope of ever paying back their loans Most of of us have more interesting problems to worry about than a bunch of brats who borrowed and partied away $100K while getting a useless degree in fine arts or something and now don't want to pay it back and their parents who neglected to tell them that the world does not owe them a living.

            The sort of people who can afford to do a fine arts degree are most likely from upper middle class, wealthy parents who can get them a good job in Finance through their contacts. The problem is the poor working class student who struggles through a degree in something like mechanical engineering then finds there are no jobs in engineering available unless he wants to go and live in China.

    • America cannot be viable long term on a service-based economy.

      Why not? There is only so much I need in terms of physical goods. As I make more money, that becomes a smaller percentage of my income. Frankly, I think we need some manufacturing, but that should become a smaller and smaller percentage of our economy.

      • by roman_mir (125474)

        That's fine if your trade is balanced and you can repay your debts with your services. As it stands, you can't have service economy because your trade deficit is about 50Billion USD per month, and it's been there for decades, growing your debt.

        If you can export enough services to cover your imports, then there is no reason why you shouldn't be able to have a 'service sector economy', but you do not export enough services to do that.

        • We have a trade imbalance because there is a global demand for dollars. Countries use our dollar for their reserves. As long as this is the case, we will have an artificially high dollar. In a floating currency, there is absolutely nothing that would support a long term trade imbalance. Should countries decide to abandon the dollar as a reserve currency, and you will see the US standard of living pop like a balloon, but this has nothing to do with having a service economy.

      • by tehcyder (746570)

        America cannot be viable long term on a service-based economy.

        Why not? There is only so much I need in terms of physical goods. As I make more money, that becomes a smaller percentage of my income. Frankly, I think we need some manufacturing, but that should become a smaller and smaller percentage of our economy.

        You appear to be confusing the term "manufacturing" with "production of consumer goods".

    • There is no reason why the US can't have a long-term service-based economy. Consider for example Switzerland, a country that aside from agriculture and high-end watches, doesn't really produce a whole heck of a lot. But they have (historically, sadly not as much anymore) excellent banking and financial services which has kept the country very prosperous and well within the top 10 countries in term of per-capita wealth.

      The problem is, just like Rome the US has a corrupt political system. The number of pe
      • by Paul Fernhout (109597) on Saturday October 06, 2012 @04:15PM (#41570879) Homepage

        Switzerland is a terrible example because it is a relatively small country with a large banking sector that essentially prospered in part by skimming a percentage off of huge global economic flows (including historically shielding transactions of dubious legality via their privacy laws). Such a pattern of success can't work that way for everyone, as nice a country as Switzerland may be in many respects..
        http://en.wikipedia.org/wiki/Economy_of_Switzerland [wikipedia.org]

        The central issue regardless of what jobs people do is that so much wealth has become concentrated in so few hands. This has happened in big part because the value of automated capital managed by large bureaucratic systems with monopolies over markets is triumphing over the value of individual human labor. See Marshall Brain's "Robotic Nation" article for more details:
        http://marshallbrain.com/robotic-nation.htm [marshallbrain.com]

        You can't have a "service" economy when robotics and AI is better than most people for most tasks. You can't have a service economy when most things become manufactured so well they don't need much servicing or it is just cheaper to replace them with new things fresh from the automated factory.

        That said, I feel that your other points on the US/Roman comparison are insightful.

      • by roman_mir (125474)

        Switzerland is a huge exporter, not only of watches but of machinery, medical supplies, food, all sorts of things are made in Switzerland.

        Unfortunately they have pegged the Franc to the Euro, which is the dumbest idea they ever had.

        As to having a 'service sector economy', as long as you balance your imports with your exports, it doesn't matter what economy you have, but you are not balancing your imports with your exports. You have a huge trade deficit, you had it for decades now, adding to the debt. 54 or

    • Headlines like "Internet accounts for 5 million jobs and 4% of the economy" are misleading because they do not say how many jobs the internet made obsolete or how much older economic activity is no longer needed. In the same way that agricultural labor went from 90% of the US workforce (200 years ago) to about 2% (although lots of people still garden as a hobby), manufacturing etc. is going from around 35% of the US workforce (50 years ago) to around 10% now and probably, like agriculture, around 2% fairly

    • by Solandri (704621)
      We missed our chance in the 1980s-1990s. When replacing manufacturing jobs with robots became viable, we should've gone whole hog with that. Replacing assembly line workers with robots, and retraining those workers for other jobs like operating and maintaining those robots or getting into the growing computer industry. Instead we opted to protect those low-skill but (compared to robots) high-wage jobs. Consequently when another country offered to do the same assembly line jobs for a lower price, the job
      • by tehcyder (746570)

        The increased productivity from a modern economy means a smaller and smaller percentage of your productivity (roughly, time spent working) is devoting to actually making things that are necessary for life like food, housing, transportation. A larger percentage can be spent on doing optional things like eating out, going on vacations, etc.

        John Maynarde Keynes said something similar in 1930. It appeared to be true up until the 1960/70s, but since then working hours have not decreased any further, and in fact most people probably work more now than they did in the 1970s.

    • by jbo5112 (154963)

      Our manufacturing base in the US is growing. You must be listening to misguided politicians saying we need to expand it to provide more jobs (notably Santorum), when manufacturing provides fewer and fewer jobs. We are losing manufacturing jobs worldwide, and China (a scapegoat for taking our jobs) is losing jobs at a faster rate than us. It's generally cheaper to manufacture in the US than China, and companies are taking notice.

      With the growth of new manufacturing technology, such as small scale CNC lath

      • by tehcyder (746570)

        With the growth of new manufacturing technology, such as small scale CNC lathes, 3D printers and cheap/free 3D software (e.g. Google Sketchup), the means of small scale production are becoming cheap enough for anyone industrious. It's a second industrial revolution. One where you don't have the service of a local factory telling you things they'll pay you to do, but you get to control production.

        I think you're being over-optimistic. There is a reason that we have huge factories producing things. Not everything can be done in your garage.

    • I'm actually curious who thought transitioning the US to a service economy was a good idea.

  • by MSTCrow5429 (642744) on Saturday October 06, 2012 @01:33PM (#41569539)
    Harvard Business School Study Sponsored by Ad Group Says Internet Accounts For 5.1M US Jobs, 3.7% of GDP
  • Ads don't support the internet. Users support the internet. Content attracts the users. Ads support SOME of the content.

    Of course an advertising organization would twist this.

    • by rgbrenner (317308)

      users support the internet? Maybe the ecommerce side.. but the content websites? really?

      how much have you paid to slashdot today?

      Why is there no subscription mark next to your UID? Is slashdot not worthy of your support?

      If you haven't paid anything, then how are you supporting it?

      slashdot requires 16 web servers, 7 db servers, 2 db read-only servers, 2 load balancers, and 3 misc systems.
      http://slashdot.org/story/07/10/18/1641203/slashdots-setup-part-1--hardware [slashdot.org]

      How much of that hardware did you pay for with

      • by betterunixthanunix (980855) on Saturday October 06, 2012 @02:14PM (#41569909)

        how much have you paid to slashdot today?

        Slashdot is well known and popular because of its users -- people come here to read comments and have discussions, to the point where they need to be reminded to read the articles. Slashdot does not need to pay people to write things, moderate, etc. This is an online community, not some curated experience.

        slashdot requires 16 web servers, 7 db servers, 2 db read-only servers, 2 load balancers, and 3 misc systems.

        I manage that many computers in my spare time, and unlike the systems I voluntarily deal with, Slashdot only needs a handful of applications to work (you might even say Slashdot only needs one application to work, but I suspect this is divided into several parts). Slashdot has a high load to deal with, but you are not talking about users running arbitrary applications.

        If anything, I would say that Slashdot-style websites would be the winners if everyone installed ABP. Websites where the only operating costs are keeping a handful of servers online are websites whose costs can be covered by other means if necessary -- micropayments, merchandising, etc. If that is impossible, then the web needs to start being decentralized, users participating in serving the websites they visit (a P2P revival, built right into your browser).

        So yeah, the users support Slashdot, because if we were not commenting on articles and arguing with each other then nobody would visit Slashdot.

        • by tehcyder (746570)
          Even if slashdot paid nothing for its bandwidth and managed to run on equipment supplied by and maintained by volunteers, it would then just be a hobby site, not a business. I don't think that's a bad thing, I just want to point out that you're then talking about something completely different than economics.
      • how much have you paid to slashdot today?

        $0. The same amount I've been paying directly to Craigslist.

        And Craigslist does have ads, don't get me wrong. To list an apartment for rent, or to list a job opening on craigslist, you have to pay a non-trivial amount. But as users on Craigslist, we actually want those posts to be paid. Posting an apartment for rent, or posting a job, on there used to be free, but that meant those boards were flooded with posts from people who were not really serious about hiring anyone, or renting to anyone, but that just

  • by Bob9113 (14996) on Saturday October 06, 2012 @01:55PM (#41569741) Homepage

    Like the music industry, the advertising industry is using jobs numbers to imply that they are inherently good. Like the music industry, there is an ideal level of their product -- the level at which it maximizes the long-run GDP growth rate. Beyond that point, increasing employment in their industry harms GDP growth by applying resources (labor in this case) beyond the efficient allocation level.

    The music industry has a government granted monopoly in copyright. When that grant becomes too powerful, the industry consumes more resources than is efficient and is a net drag on the economy. Their employment numbers climb while their net contribution to the economy becomes negative.

    Advertising, at its worst, distorts consumer behavior and causes unearned cashflow. This unearned cashflow causes corporations to focus their product development on features that advertise well even if they do not result in genuine customer satisfaction, resulting in a net drag on the economy. A portion of the distorted cashflow is channeled back into advertising to keep the distortion running despite negative customer experieneces. As employment in advertising rises past the efficient level, each additional job represents a net cost to the economy.

    In any industry, not just those two mentioned, there is a GDP maximizing level of employment. Going beyond that point costs us all in the long run. In traditional industries, that point is defined by the guns versus butter balance [wikipedia.org]. But that is only an upper bound. In industries that have a structural inefficiency, like government granted regulatory monopolies or the potential to distort consumer behavior, the balancing point is reached at a lower level. In those industries, using employement as a measure of societal benefit is particularly perilous.

    • by tehcyder (746570)

      Advertising, at its worst, distorts consumer behavior and causes unearned cashflow. This unearned cashflow causes corporations to focus their product development on features that advertise well even if they do not result in genuine customer satisfaction, resulting in a net drag on the economy.

      All advertising is about persuading people to buy things they do not need or even particularly want. If it's not distorting consumer behaviour, it's not doing anything at all, is it?

      The idea that you can split up "good" and "bad" advertising is just absurd..

      • by Bob9113 (14996)

        If it's not distorting consumer behaviour, it's not doing anything at all, is it?

        Yes, sometimes. Sometimes advertisements make a potential customer aware of a new product that satisfies a want more efficiently, or makes them aware of a new way to use an existing product to satisfy their wants. In such a case the ad is not distorting behavior in the economic sense; the person's lack of informedness prior to seeing the ad was a distortion preventing a mutually beneficial trade from happening.

  • Does this mean government can create jobs or am I misssing something?
  • They have the indirect-direct correlation backwards. I would describe those 2 million as indirect jobs of other economic forces. I.e., ad supported internet jobs are there because others do things that want/need advertising.

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