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The retail industry continues to be the biggest online ad spender in the US, according to the latest revenue report from the IAB and PwC. Retail advertisers accounted for 20% of the $17 billion in first half (H1) revenues, or $3.4 billion. Interestingly, though, that’s actually a decline from H1 2011, when the retail industry accounted for 24% of ad dollars, or $3.5 billion. So, while overall online ad revenues rose 14% year-over-year in H1, retail ad spending was stagnant.

Behind the retail industry, auto advertisers accounted for 13% share of online ad revenues (up from 11% last year), as did financial services advertisers (unchanged from H1 2011). In the 4th spot, telecom accounted for 12% of online ad revenues, down from 14% last year, while the 5th-largest verticals, computing products and leisure travel, accounted for 8% of revenues.

Online Ad Revenues Still Highly Concentrated

Further analysis from the report indicates that online ad industry revenues are highly concentrated, with 73% of Q2 revenues going to the 10 leading ad-selling companies, up slightly from 72% in Q2 last year. Companies ranked 11th to 25th accounted for another 9% of revenues, while those ranked 26th to 50th pulled in another 8%. In total, then, the top 50 ad-sellers controlled 90% of the online advertising market in Q2, a level fairly consistent with previous years.

The online space has previously been shown to be highly concentrated in terms of user attention, too. Last year, data from Compete showed that the top 3 web domains by percentage of total time spent online accounted for one-quarter of total consumer attention in September 2011.

Two-Thirds of Revenues Priced on Performance Basis

Meanwhile, in H1, 67% of online ad revenues were priced on a performance basis, up from 64% in H1 2011. This model has been on a consistent upward trend for several years now, and is up from 46% of revenues in 2005. Pricing on a cost-per-thousand (CPM) or impression basis accounted for 31% share of revenue in H1 this year, with this model seeing the opposite trend over time. Hybrid pricing has almost disappeared as a pricing model over the years, down from 13% of revenues in 2005 to 2% this year.

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