September 26, 2006, 12:00 AM

Interactive ad revenue up 37% to a record $7.9 billion in the first half

A study by the Interactive Advertising Bureau and PricewaterhouseCoopers finds interactive ad revenue exceeded $4 billion for the first time in the second quarter.

Paul Demery

Managing Editor, B2B E-commerce

 

Revenue for interactive advertising saw their seventh consecutive quarter of growth, exceeding $4 billion for the first time in the second quarter. Revenue also rose 37% over lat year to a record $7.9 billion in the first half of 2006, according to a new study by the Interactive Advertising Bureau and PricewaterhouseCoopers.

 

“The latest results reaffirm the Internet’s growing importance for marketers to integrate online advertising into their overall media plans” says David Silverman, partner in the entertainment and media practice of PricewaterhouseCoopers. “While search advertising remains the largest format in terms of revenues, we expect to see new formats like video ads continue to emerge as advertisers seek to leverage branding opportunities afforded by the growing installed base of broadband users."

 

The study defined interactive advertising to include formats and technologies such as search, broadband, lead generation, behavioral targeting, consumer-generated content and emerging platforms such as mobile and iPTV.

 

By format, search advertising accounted for the largest share of online spending, representing 40% of all ad spending on interactive formats, a dollar value of $3.1 billion. Search also accounted for the largest share, 40%, of all interactive ad spending in the first half of 2005, or $2.3 billion. Classified ads, at 20% of all interactive ad spending in the first half, were up from 18%, or $1 billion, from the first half of last year. Referrals and lead generation, at 8% all interactive ad spending in the first half, accounted for $633 million, up from 6% or $347 million in the first half last year.

 

Display-related ads-a category including rich media, ad banners and display ads, sponsorships and slotting fees-declined slightly as a percentage of ad format spending, dropping to 32% in the first half from 34% last year, but rose in terms of dollars spent, representing $2.5 billion in the first half, up from nearly $2 billion last year.

 

 

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