Online ad revenues increased 14% year-over-year in the first half (H1) of this year, according to [pdf] the latest revenue report from the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC). That brought H1 revenues to a record total of $17 billion, from $14.9 billion in H1 2011. Q2’s $8.7 billion in revenue makes it the largest quarter on record save for Q4 2011 ($9 billion), and itself represents a 14% year-over-year gain. Looking back to 2003, Q2 revenues have grown at a brisk compound annual rate of 20.2%. Still, that growth is more muted when factoring in inflation, as well as the growth of the online audience. A recent MarketingCharts analysis of IAB data showed that online ad spend per user, in constant dollars, has risen by roughly 50% between 2000 and 2011 (from $67 to $100), and has grown by slightly less than 3x since 2002.
Mobile Grows Fastest, But Search Drives Overall Gains
Breaking the H1 revenue figure down into ad formats, the report finds that mobile revenues grew 95% year-over-year, to $1.2 billion. That was the biggest jump of the various formats, and signals mobile’s increasing significance in the online ad space as it accounted for 7% share of total online ad revenues, up from 4% a year earlier.
Search, though, remains the giant, and continues to grow at a rapid clip. Search revenues reached $8.1 billion in H! 2012, which represents 19% growth from H1 2011 ($6.8 billion). For comparison’s sake, that growth rate was faster than that of online video (+12%), which Forrester (as reported by Ad Age) recently forecast would triple in revenues by 2017. Search grew to represent 48% of total revenues in H1, up from 46% a year earlier.
Still, search’s 19% growth is slower than last year’s 27% year-over-year gain – and that was a primary contributor to H1’s overall increase of 14% being a step back from last year’s 23% growth.
Display’s Share of Revenues Drops
Display-related advertising accounted for one-third of total revenues in H1. Although display-related revenues increased 4% year-over-year, that was slower than the overall growth rate, resulting in a drop in share from last year’s 36%.
Display-related revenues in H1 consisted of display/banner ads (21% share of revenues; $3.6 billion), online video (6%; $1 billion), rich media (3%; $0.5 billion), and sponsorship (2%; $0.4 billion).
The other remaining contributors to the H1 $17 billion total were lead generation (which increased 4% to $834 million, and held 5% share) and email, which declined by 1% to $78 million and 0.5% share.
- In Q2, search held 47% of revenues, up from 46% in Q2 2011.
- Display-related revenues grew 6% year-over-year in Q2.
- Mobile accounted for 8% share of Q2 revenues, double the share from Q2 2011.
- Email (+2%) and lead gen (+4%) revenues were up in Q2, although classifieds revenues dropped 7%.