Online Ad Revenue Up 10.6%

    March 30, 2009

Internet advertising revenues in the U.S. remain solid, reaching $23 billion in 2008, according to a new report from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers.

Overall 2008 revenues totaled a record $23.4 billion, surpassing 2007’s record of $21.2 billion by $2.2 billion or 10.6 percent.

Fourth-quarter revenues of $6.1 billion mark the first time the interactive advertising industry reached and exceeded $6 billion in a single quarter. The figures represent a $154 million or 2.6 percent increase from 2007’s fourth quarter, which had revenues of $5.9 billion.

"We are seeing an ongoing secular shift from traditional to online media as marketers recognize that ad dollars invested in interactive media are effective at influencing consumers and delivering measurable results," said Randall Rothenberg, president and CEO of the IAB.

"In this uncertain economy, where marketers know they need to do more with less, interactive advertising provides the tools for them to build deep, engaging relationships with consumers-the experience marketers gain from this will deliver dividends especially after the economy turns around."

Internet Advertising Revenues

Search remains the main driver of revenue growth, showing a 19.8 percent increase over 2007. Digital video is still a small overall contributor, more than doubled its revenue with an increase to $734 million from $324 million in 2007.

As in 2007, retail, financial services, computing and automotive remained the four largest verticals among Internet advertisers in 2008. Consumer packaged goods, an industry historically slow to embrace interactive advertising, increased its share of total Internet ad revenues by 60 percent over 2007. The Internet is now the third largest ad-supported medium.

"Though some categories in the fourth quarter slowed or even dipped, reflecting the current economic challenges, the overall performance is up, confirming interactive’s ever-growing importance to the successful marketing mix," said David Silverman, Partner, Assurance, PricewaterhouseCoopers.