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5/15/2008
07:37 PM
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Online Advertising Revenues Rising

Consumer advertisers were the biggest spenders online, accounting for 55% and 52% of the total spent in 2007 and 2006, respectively, IAB said.

Internet-advertising revenues reached $21.2 billion last year, setting a record for the fourth consecutive year

Compared to 2006, revenues rose by 26%, the Interactive Advertising Bureau said in a report released with PricewaterhouseCoopers. In the fourth quarter of 2007, revenues hit $5.9 billion, the highest for a single quarter and a 24% jump from the same period a year ago.

IAB attributed the rising revenues to innovation in interactive marketing. "Explosive innovation in the industry is providing marketers with new and unique ways to reach consumers -- it's a very exciting time," Randall Rothenberg, president and chief executive of the IAB, said in a statement.

Consumer advertisers were the biggest spenders online, accounting for 55% and 52% of the total spent in 2007 and 2006, respectively. Search, display, classifieds and lead generation all grew at a "healthy rate" last year, the IAB said.

Keyword search accounted for 41% of the market, the highest percentage; followed by display advertising, 21%; and classifieds, 16%. All other categories were less than 10%.

Performance deals were the most popular pricing model, accounting for 51% of the market. Cost per thousand impressions was second with 45%. The remaining revenue was from hybrid pricing models.

The top 10 Web sites garnered 69% of the ad revenue in 2007, the same as the year before. The top 25 sites accounted for 80%, compared to 82% in 2006.

While last year set a record, this year has been hurt by the U.S. economic slowdown. Web sites with more than 100 million monthly page views saw monetization rates from ad networks plummet by 52%, from 38 cents in March to 18 cents in April, according to PubMatic, a company that automates and optimizes ad inventory decision-making for Internet publishing.

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