Internet Ad Revenue Grew 14% in First Half of 2012, But CPG Staying In TV

Signs That TV Ad Spending Is Staying In TV

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Internet ad revenue hit $17 billion in the first half of the year, a 14% increase over the same period last year, according to the latest IAB Internet Advertising Revenue Report, conducted by PwC. But the digital-ad world is still waiting for the consumer packaged-goods category to join the party; digital-ad spend in that category grew just 4% year-over-year and made up just 5% of total internet-ad revenue in the first half of the year.

Still, growth in other advertiser categories helped offset the CPG letdown. Ad spending among pharmaceutical and health-care companies was up 81% year-over-year to $1.1 billion, and the automotive category spent $2.2 billion on internet advertising, a 29% increase over 2011.

Among digital-advertising media, mobile -- which includes phones and tablets -- was the biggest gainer, growing 95% to $1.2 billion. Spending on mobile now accounts for 7% of total internet advertising, up from 4% last year. For all the talk of the death of the banner ad, spending on that format still rose slightly, to $3.6 billion from $3.3 billion, though its overall share fell one percentage point to 21%.

Digital-video advertising increased 18% to a little more than $1 billion, but its share of the total market remained flat at 6%. "That number came in a little softer than I thought," PwC partner David Silverman said in an interview.

The IAB's Sherrill Mane, for her part, said the reason is clear: "Digital-video supply has been fairly limited," she said.

Where spending on social networks fits in isn't exactly clear. Mr. Silverman said the report accounts for social-media spending, but it's not broken out as a separate category. That's largely because the IAB hasn't reached a consensus from its members that run social-media properties to do so, according to Ms. Mane. (And these member companies are one of the key sources of data for the report.) One of the reasons for that is that since Facebook's revenue numbers are public and account for the majority of ad spending on social media overall, breaking out a total social-media number would shed too much light on revenue at non-Facebook social media companies that are still privately-held.

You can download the full report at www.iab.net/AdRevenueReport.

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