Q3 Online Ad Spend: Strong Increases, Slower Growth

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Online advertising revenues surpassed $5.2 billion during the third quarter of this year, representing a 25.3 percent year-over-year increase, according to the Interactive Advertising Bureau and PricewaterhouseCoopers.

The latest figures from IAB/PwC's regular ad spending report estimates advertisers spent $1.1 billion more on interactive ads during the quarter just ended than they did in Q3 2006. In addition to the annual growth rate, that sum represents a 3 percent sequential spending increase, particularly impressive considering the third quarter's historic weakness. Between Q2 and Q3 2006, spending grew 2 percent.

"If you look at the numbers both in pure number form and in percentage increase, it is a really good story, and continues to be a growth story," David Doty, SVP, Thought Leadership at the IAB told ClickZ News.

That said, annual growth has slowed somewhat. Just as with 2007's first half, the current spending report saw a slight deceleration of growth in online ad spending compared with Q3 2006, when online advertising grew by 30 percent. However, that may not suggest a lack of health for online advertising so much as a maturation of the medium and advertiser investment in it. Additionally, as actual spending on interactive advertising increases, growth rates become harder to sustain. "It's a healthy year-on-year increase," said David Silverman, partner, Assurance, PricewaterhouseCoopers.

Doty noted all three quarters in 2007 have hit new spending records, both sequentially and on a historic basis. "You have a total of $15.2 billion [to date], and it seems that from all indicators, this growth will continue and we might have our first $20 billion year," he said.