Search continues to lead growth in online ad spend

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New York—Internet ad revenue reached $7.9 billion in the first six months of the year, up 37% over the first half of last year, according to the Internet Advertising Revenue Report from the Interactive Advertising Bureau and PricewaterhouseCoopers.

The report was released Monday at the MIXX Conference in New York during Advertising Week, an annual gathering of advertising and media industry executives.

Search continues to lead that growth, accounting for 40% of total online advertising revenue in the first half. Search is followed by display ads, which account for 30% of total revenues, classified advertising (20%), referrals/lead generation (8%) and e-mail (2%).

Online advertising revenue totaled $4.1 billion in the second quarter, up 36% from the year-earlier period.

CPM-based pricing represented 48% of online advertising in the first half, performance-based pricing made up 47% and hybrid models contributed 5% to the total.

Another report released Monday—eMarketer’s “U.S. Ad Spending: From Peaks to Plateaus”—predicted advertising spending online will slow slightly this year, to 26.8% growth vs. a 30% annual pace over the past two years.

EMarketer projects online advertising will reach $15.9 billion this year, growing to $25.0 billion in 2010. Online ad spending will account for 5.7% of total ad spending this year and 8.9% in 2010, according to eMarketer.

Search spending will continue its dominance, eMarketer said, forecasting search to account for more than 40% of online ad spending through 2010.

—Kate Maddox and Matthew Schwartz

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