The numbers are still significantly down from the same period last year, but any increase is a good sign of things to come. There has been a 5.4% decline from last year.

"The Internet has transformed the consumer experience of media, providing marketers with unprecedented opportunities to engage with their customers," said Randall Rothenberg, President and CEO of the IAB. "The advertising sector overall has been hard hit by the economy, but digital media has been a bright spot within the larger economic downturn as it is capturing an ever-increasing piece of marketers’ advertising spend."

"While all segments of the media industry have experienced declines, online advertising remains resilient and is once again showing signs of growth," said David Silverman, a partner at PricewaterhouseCoopers LLP.

The information from the IAB/PWC is considered the most accurate measurement of interactive ad revenue, the IAB says, because its compiled directly from info supplied by companies selling advertising on the web. The IAB releases a full report twice a year to reflect half-year periods. It will be interesting to see how the second half of the year plays out in its entirety.

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"Among major economic measures, Industrial Production (IP) and Personal Consumption Expenditures (PCE) have the highest correlations with advertising, and forecasts of these variables inform our predictions of advertising revenue growth and decline," says MAGNA. "While consensus forecasts for PCE have not changed meaningfully, expectations for IP have improved.  As a result, we are moderating our 2010 advertising forecast and now expect normalized advertising revenues (excluding local TV political and national TV Olympic revenues) to decline 1.3% next year."

The firm previously published expectations for a decline of 2.1% in 2010. In total, they expect suppliers to generate $159 billion of normalized advertising revenue next year.

For the fourth quarter of this year, MAGNA forecasts that U.S. media suppliers will collectively generate 9% less ad revenue than the year before. They also expect industry revenues to fall from $47.5 billion in the fourth quarter of 2008 to $43.2 billion.

"These figures reflect a moderating pace of decline compared to estimated revenue reductions of 13% during the third quarter and 18% declines during each of the first two quarters of this year," says MAGNA. "As we previously forecast, the first half of 2009 marked the bottom of the ad-supported media economy’s decline."

Year-over-year changes in PCE fell for three consecutive quarters between October 2008 and June 2009.No period since quarterly records were first published back in 1947 has recorded any decline in PCE before the current downturn, according to MAGNA. In addition, IP fell at a quicker pace than any time since 1975 in the last several quarters.

The Internet Advertising Revenue Report, the basis for the information, is considered the most accurate measurement of interactive advertising revenues with the data compiled directly from information supplied by companies selling advertising on the Internet.

"Interactive advertising has taken its rightful place as a fixture on marketing plans across sectors, which means we aren’t immune to broader economic trends," says Randall Rothenberg, President and CEO of the IAB. "Nevertheless, consumers are spending more and more time with interactive media."

"For this, and other reasons, interactive media continues to gain share of marketing spend," he adds. "We’re confident that growth will resume as the U.S. economic climate improves. Interactive advertising is the most accountable way to reach consumers—and in this economy, digital media will be a core component of any successful marketing campaign."

While online ad revenue may be down from last year, it’s important to look at the whole advertising picture, and just how much of it is actually taken up by online ads.

PwC Assurance partner David Silverman notes, "Current economic conditions are clearly challenging. Nonetheless, interactive media continues to consume a larger piece of the overall advertising pie."

Online advertising provides a much more cost-effective means of reaching an audience than other forms of marketing. For one, there are so many different ways to reach an audience online, and the rise of social media (along with mobile) has been particularly instrumental in marketing budget allocations.

Internet Ad Spending Continues To Flourish

More advertising spending has found its way into the coffers of companies like Google and Yahoo. The report from IAB pegged first quarter 2006 ad revenue at a new record of $3.864 billion. Fourth quarter 2005 ad revenue hit $3.6 billion, while all of 2005′s ad revenue was over $12.5 billion.

“The steady growth of online advertising is a clear indication that marketers continue to believe in the opportunities and effectiveness that this medium delivers in reaching and engaging their consumers,” said Greg Stuart, CEO, IAB.

A substantial chunk of that first quarter revenue probably ended up in Google’s bank account. Google reported in its first quarter 2006 financials that it had revenue of $2.25 billion. Virtually all of Google’s revenue comes from online advertising.

That would leave roughly $1.6 billion for the rest of the industry to divide up between the various competitors. There will be more opportunity for businesses to spend on Internet advertising, as Microsoft should fully launch its adCenter service in the next few weeks.

The money should keep coming. “It is abundantly clear that marketers are seeing a compelling opportunity to leverage the Internet as a powerful medium that drives both branding and sales results,” said Peter Petrusky, Director, Advisory Services, PricewaterhouseCoopers.

Online spending for advertising is on a pace to reach $15 billion in revenue for all of 2006. That would easily exceed last year’s total and mark the second year in a row that revenue reaches double-digit billions.

Considering Google’s dominance of the industry, it may not be far-fetched to consider that Google is poised to snare around $10 billion of that revenue. Publishing 2.0 blogger Scott Karp posted his opinion that revenue distribution of online ad dollars would mimic the “long tail” of Web 2.0 site popularity:

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David Utter is a staff writer for WebProNews covering technology and business.