PwC, IAB: Internet Ad Revenues Soar, Reach Nearly $10 Billion in First Half

October 4, 2007

This article is included in these additional categories:

Email | Financial Services | Paid Search | Retail & E-Commerce

Internet advertising revenues (US) for the first six months of 2007 were nearly $10 billion – up some 26% from $7.9 billion in the first half of 2006 – and yet another new record, according to the “IAB Internet Advertising Revenue Report” from the Interactive Advertising Bureau and PricewaterhouseCoopers.

Internet advertising revenue totaled nearly $5.1 billion in the second quarter of 2007 – for the first time exceeding the $5 billion mark in a quarter, IAB said; that was a 25.4% increase over the equivalent period in 2006, as well as a 4% increase from the $4.9 billion in the first quarter of 2007.

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Search revenue accounted for 41% of 1H07 revenues, consistent with the equivalent period in 2006. Display advertising, the second-largest format, accounted for 32%, followed by Classifieds (17%) and Lead Generation (8%).

Other findings from the IAB/PwC report:

  • Consumer-related internet advertising spend is still the largest category, accounting for 54% of 2007 second-quarter revenues, up from 49% for the equivalent period in 2006.

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  • Financial Services, the second-largest category, accounted for 15%; Computing advertisers followed with 11%.
  • Within the Consumer category, the largest sub-categories in 2Q07 were Retail (46%), Automotive (21%), Leisure (13%) and Entertainment (9%).

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  • Online advertising remains concentrated with the 10 leading ad-selling companies, which accounted for 70% of total revenues in the second quarter of 2007.
  • Companies ranked 11-25 accounted for 12% of revenues, and those ranked 26-50th accounted for 9%.

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  • Some 50% of 1H07 revenues were priced on a performance basis, up from 47% reported in 1H06.
  • Some 45% of 1H07 revenues were priced on a CPM or impression basis, down from 48% for the same period in 2006.
  • Some 5% of first half revenues were priced on a hybrid basis, unchanged from the equivalent period in 2006.

The full report from PwC/IAB is available here.

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