11:07 AM

Online Ad Revenue Reaches Record Level

Marketers seen shifting more of their total advertising budgets to online.

Advertisers spent a record $5.8 billion touting their wares online during the first six months of 2005, a 26% increase over the first half of 2004, according to the Interactive Advertising Bureau and PricewaterhouseCoopers.

PricewaterhouseCoopers partner David Silverman says the firms' research shows advertising dollars are following consumers to the Internet. "Marketers may be shifting more of their total advertising budgets to online," he said in a statement.

The mix in types of ad spending in the first half of the year remained virtually unchanged from a year earlier, with 40% of ad dollars spent on search, 20% on display ads, 18% on classifieds, and 8% on rich media. Year-over-year spending in those categories soared to $2.3 billion (27% increase) for search, $1.2 billion (23%) for display ads, $1 billion (33%) for classifieds, and $463 million (26%) for rich media. Referrals and lead generations represented 6% of ad spending, increasing to $347 million, tripling in a year.

For the second quarter, Internet advertising revenue approached $3 billion, a 26% increase over the same period in 2004. Second-quarter revenue represents a 7% increase over first-quarter spending.

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