Our CEO, Rob Leathern, wrote an article on InternetEvolution.com about user value per hour recently in which he presented information about the number of hours that consumers spend with various media and how much advertising revenue can then be boiled down per user hour. Here are some of the figures and calculations in more detail for anyone who is interested (data mostly gathered based on 2008 figures):

Hours of television per year for US Adults: 230,117,876 US Adults per the Census Bureau (18+) x 120.8 hours of television per month (Veronis Suhler Stevenson) = 27,798,239,421 adult-tv-hours per month, multiply by 12 = 333,578,873,050 television hours.

Television advertising dollars: $66,997,840,000 = added a 4% increase over a 2007 figure from TNS Media Intelligence.

Television access costs: $78,886,000,000 for all cable television revenue from SNL Kagan (referenced in the US Census Statistical Abstract 2009, Table 1105). You could probably make an argument about Premium cable and non-cable delivered premium services but then you get into online premium services etc. so I chose to focus on this figure instead.

The ad revenue per user television hour is thus the TV ad dollars / the Hours of TV per year = $0.20 per user hour

Access costs for television is Television access costs / hours of TV per year = $0.24 per user hour

Internet hours for 2008 for the US = 65,163,488,083 which figure was from comScore, adding up the monthly millions of minutes for each month in 2008.

Internet ad revenue for 2008 = $23,448,000,000 from IAB/PwC report, as is the split between search and non-search (45% is search for 2008 according to the report). From looking at these two numbers you get the online ad revenue dollars per user hour = $0.36

Based on comScore and Nielsen figures on the split between time spent with search (5%), we end up with 3,258,174,404 user hours for the year for search, and 45% of the revenue ($10,551,600,000) leading to $3.24 of search ad revenue per user hour spent searching.

Internet access fees were a little more difficult to get which is why my numbers were a bit more uncertain. I got from Pyramid Research a figure of $32 billion for broadband access but the dial-up and other access proved a bit more elusive so I guesstimated another $12 billion – so if you take $44 billion in access fees you end up with $0.68 per user hour for internet access. The figure is probably more if you take into account the costs of work access and so on, but we figured a $0.50 to $0.70 range is probably reasonable and conservative.

Anyone who has build forecasts and models knows that there is always uncertainty about figures even at this scale, but hopefully the analysis is interesting to people and draws attention to the job we have to do better as online advertising practitioners – driving user engagement with brands and products and making online advertising more effective AND useful.