“The Internet has transformed consumers’ lives and how they experience entertainment, information and brands,” said Randall Rothenberg, President & CEO, IAB.

“Marketers have embraced digital media because that’s where they can engage with their consumers. This vibrant, innovative industry is creating jobs and contributing to the growth of the U.S. economy.”

The survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising.

“Advertisers are shifting more of their brand messaging online, accounting for this welcome surge in a difficult economy,” said David Silverman, a partner at PwC.

“This trend reflects the accelerating shift in consumer behavior towards the Internet and away from traditional media.”
 

"With the strongest first half on record, 2010 has so far indicated that Internet advertising is back, and better than ever," says PwC Assurance partner  David Silverman. "While the recession clearly affected short term growth in 2009, with double digit growth in both search and display during the first six month of 2010, the long term prospects continue to be strong."

"Consumers’ appetite for immersive online experiences is limitless as technological innovation and creativity give rise to new forms of entertainment and information in the digital age," says IAB President and CEO  Randall Rothenberg. "This report highlights marketers’ ongoing adoption of interactive media to build brands—and that’s only going to continue."

Display-related advertising (including banners, rich media, digital video and sponsorships) totaled over $4.4 billion in the first  half of the year. That’s up 16% from the same period in 2009.

Digital video reached its highest half-year performance ever, up 31% from 2009. Search advertising accounted for the largest percentage of overall interactive spend at 47 %. It accounted for  $5.7 billion for the period, up 11.6% from 2009.

"Interactive advertising revenue is on a strong upward trajectory," adds Sherrill Mane, SVP, Industry Services, IAB. "Nearly all types of ad formats are showing positive movement and marketers across all advertising categories, most notably consumer packaged goods and pharmaceuticals, are increasing their investment in digital media."

This is on top of all of the organic search marketing and social media marketing companies are participating in. 

Search and display advertising continue to account for the largest percentages of overall advertising spend.  Search revenues amounted to more than $5.1 billion for the first six months of 2009, up three percent from the same period in 2008.

"While the overall advertising market has continued to be impacted by current economic conditions, marketers are allocating more of their dollars to digital media for its accountability and because consumers are spending more of their leisure time online," said David Silverman, PwC Assurance partner.

Display-related advertising which includes rich media, digital video and sponsorship totaled nearly $3.8 billion in the first six months of 2009 showing a slight decline from the same time in 2008. Digital video continues to see solid growth with a 38 percent increase from the first half of 2008.

"We are in one of the most difficult economic slumps in decades. Interactive is one of the advertising sectors that has been least affected," said Randall Rothenberg, President and CEO of the IAB.

"In recent years the digital revolution has driven a transformation of how consumers experience advertising and media. As the economy improves, we’re confident that brands will devote an even greater share of their budgets to reaching consumers as they make interactive media a larger part of their lives."
 

Only 1.1 billion surf the Web.

So when Vinton G. Cerf, who currently serves as Google’s vice president, states that mobile phones will fuel the growth of the Internet, well . . . maybe we should believe him.

“The mobile phone has become an important factor in the Internet revolution,” said Cerf. “You will get those other 5.5 billion people only when affordability increases and the cost of communication goes down.”

Anil Penna reported on Cerf’s presentation, and wrote that he identified India and China as two of the countries that are most ripe for growth in Internet use (thanks mostly to the rapid growth of their populations).

And although India and China aren’t the world’s wealthiest nations, Cerf noted, according to Penna, that “handset manufacturers and mobile-phone companies are offering an array of Internet-enabled features and services . . . while dropping charges under the pressure of growing competition that will bring many of the new subscribers to the Internet.”

By referring back to a 2005 interview with Ubiquity, we can see that Cerf’s discourse on mobile phones isn’t something that he cooked up the night before – he’s long believed that they drive Internet use. We can also see what he believes will come as the “next step.”

“[A]s more and more of the mobile phones become Internet-enabled,” Cerf predicted, “eventually they will be sufficiently Internet-capable that the traditional telephone call will evaporate and be replaced by applications that make use of Voice-over-IP.”

Cerf is one of the founding fathers of the Internet, and spent several years working at MCI. His word is good enough for me.

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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.