Internet advertising revenue soars to nearly $10 billion in first half

At nearly $10 billion, Internet advertising revenue from search, classified, lead generation, e-mail and display advertising was up almost 27% in the first half of the year from the first six months of 2006, according to a new survey from the Interactive Advertising Bureau and Pricewaterhouse Coopers. In the second quarter, Internet ad revenue was nearly $5.1 billion, a 25.4% increase over the year-ago quarter. It was the first time Internet ad revenue for a single quarter exceeded $5 billion, according to the IAB Internet Advertising Revenue Report.

At approximately $4.1 billion, revenue from search advertising accounted for 41% of the first half’s total revenue, the largest single share. Revenue from online display advertising, including rich media/video, banners, sponsorships and slotting fees, accounted for $3.2 billion or 32%. Revenue from classified advertising was $1.7 billion or 17% of the total; lead generation nearly $800 million, or 8%; and e-mail advertising $200 million, approximately 2%.

Performance deals were the most popular pricing model, accounting for approximately $5 billion, or 50% of the first half’s total, followed by CPM (cost per thousand impressions) at approximately $4.5 billion (45%) and hybrid deals $500 million (5%).

“The torrid growth of interactive advertising revenue persists and these results are really no surprise but very welcome news,” says Randall Rothenberg, president and CEO of the Interactive Advertising Bureau. “More and more marketers have embraced the reality that interactive is the fulcrum on which their brand strategies need to be based and we expect robust growth to continue.”

The numbers represent data from all companies that report meaningful online advertising revenue. The survey includes data concerning online advertising revenue from web sites, commercial online services, free e-mail providers, and other companies selling online advertising.