Producer Price Index for Internet Publishing and Web Search Portals—NAICS 519130

In its ongoing effort to expand service sector coverage in the Producer Price Index (PPI), the Bureau of Labor Statistics (BLS) introduced new price indexes for Internet Publishing and Web Search Portals — North American Industry Classification System (NAICS) 519130, in January 2010.¹ These indexes appear in table 5 of the PPI Detailed Report and are available online through the BLS website.

The Internet publishing and web search portals industry consists of firms primarily engaged in exclusively publishing and/or broadcasting content on the Internet. Examples include firms that publish Internet news sites, newspapers, periodicals, databases, directories, and games. Firms that broadcast online videos, music, and TV or radio stations also are included in this industry. Additionally, this industry consists of firms known as web search portals. These firms operate web sites that use a search engine to generate and maintain extensive databases of Internet addresses and content in an easily searchable format.

Detailed price indexes have been introduced for three service categories:

• Search and textual advertising sales
• Display and other advertising sales
• Subscription, content access, and licensing sales

The index for search and textual advertising sales measures changes in the fees received by industry firms each time an Internet user clicks on a sponsored search advertisement. Sponsored search advertisements are textual listings that appear in response to user generated queries. Advertisers typically bid on the per click price of the sponsored search listing in order to influence its position in the search results. In general, the higher the bid, the higher the advertisement is displayed in the list of search results. Sales of other textual advertisements, including listings in Internet directories and contextual advertisements also are included in this index.

The index for display and other advertising sales measures changes in the prices received for advertisements that consist of pictures, graphical designs, animation, or logos in addition to text. This includes banner and video advertisements. These transactions may occur on either a per click or a per impression basis. Under a per impression pricing model, the Internet publisher is paid each time a display advertisement appears on its website.

Many Internet publishers contract with third party firms known as ad networks to assist them with selling advertising space. Ad networks place advertisements on the websites of Internet publishers in exchange for a share of the revenue generated by the associated clicks or impressions. Although ad networks are not included in this industry, the fees received by Internet publishers from these agreements are included in both the search and textual advertising sales index and the display and other advertising sales index, depending on the type of advertisements placed.

The preferred type of price for advertising transactions is an average price. For these average price calculations, the total revenue earned from all sales of a specific type of online advertisement that are made within a specified time period is divided by the total number of clicks or impressions that occurred.

Internet publishers also earn revenue by selling access to the content they publish or broadcast on their websites. Access to content is sold through subscriptions and one-time content access fees. Changes in the prices received for this access are measured in the subscription, content access, and licensing sales index.

The preferred price for online subscription fees is an average price. For these average price calculations, the revenue generated from the sale of all subscriptions of a specified type (new or renewal) and duration (one year, two years, etc.) transacted within a specified time period is divided by the number of subscriptions sold. For content access fees that represent one-time access to content, such as a fee charged to view a single newspaper article, an actual transaction price is collected.

The subscription, content access, and licensing sales index also tracks changes in the fees received by Internet publishers for granting independent parties the right to publish their content. The compensation for royalty and licensing fees varies widely based on the agreements made between Internet publishers and license purchasers. For content licensing services that are transacted frequently an actual transaction price is collected. Content licensing services that are highly customized or transacted infrequently are updated with estimated transaction prices.

For further information on NAICS 519130, contact Sarah Eian at (202) 691-7632 or by e-mail: eian_s@bls.gov.

 

¹ Industry 519130 was introduced in the 2007 NAICS classification. In prior versions of NAICS, the activities of this industry were split between NAICS 516110, Internet publishing and broadcasting, and NAICS 518112, Web search portals. The PPI index for NAICS 518112 has been discontinued.

 

Last Modified Date: February 18, 2009