Online Ad Revenues Continue To Set Records

Online ad revenues in the third quarter of 2007 climbed more than 25% to a record $5.2 billion, an industry trade group said Monday.

Revenues topped the third quarter of 2006 by $1.1 billion and were nearly 3% higher than this year's second quarter, the Interactive Advertising Bureau said. Each quarter this year has set new highs, with revenues reaching $4.9 billion in the first quarter and $5.1 billion in the second quarter.

Revenues for the first nine months of the year totaled $15.2 billion, up nearly 26% over the $12.1 billion recorded during the same period last year. "Marketers large and small have come to accept digital media as the fulcrum of any marketing strategy," Randall Rothenberg, president and chief executive of the IAB, said in a statement.

Internet ad revenues this year is on track to exceed $20 billion, said Peter Petrusky, director for entertainment, media, and the communications practice of PricewaterhouseCoopers, which compiles the data for the IAB report. Driving ad sales is the emergence of new platforms that marketers can use to reach consumers. Those platforms include broadband video, rich Internet and mobile applications, and social media.

While only a small portion of the overall advertising market, online advertising has had consistent double-digit growth as advertisers funnel more dollars from traditional media into the Web, which holds the promise of being able to target consumers based on their interests. The concept forms, for example, the foundation of Web company Google's multi-billion-dollar business in search advertising. People see ads related to search terms and keywords.

The spending trend has prompted a number of acquisitions this year of online advertising companies. AOL agreed to buy Quigo for an undisclosed amount, Google plans to buy DoubleClick for $3.1 billion, and Microsoft is acquiring aQuantive for $6 billion.