Online Ad Revenues Hit $15 Billion in First Half 2011

Online ad revenues continue to rise, growing at near pre-recession levels, according to the Interactive Advertising Bureau. The organization reported Internet ad revenues hit $14.9 billion for the first half of this year.

That near-$15 billion represents an increase of more than 23 percent over revenues in the first six months of 2010, which reached $12.1 billion. The growth rate in the first half of 2011 doubled compared to the previous first half, too; in 2010 it was 11.3 percent.

The first half 2011 growth rate is close to what it was back during the first six months of 2007, when online ad spending grew 26 percent to just under $10 billion.

While search ads still account for around 50 percent of all online ad spending, digital video spending leapt around 42 percent over last year.

However, while online ad spending rose, CPMs fell around 5 percent overall, the IAB noted. “A lot of our growth is coming from more volume rather than CPM increases,” said Sherrill Mane, SVP industry services at IAB. In fact, the report showed that while impression-based ad spending grew around 11 percent, spending on ads sold by impression accounted for a smaller portion of all ads in the first half of 2011 compared to the same period in 2010 – down from 35 percent in 2010 to 31 percent this year.

The IAB conducted the research with PricewaterhouseCoopers.

Display ad revenues in the first half hit $5.5 billion, an increase of 27 percent over the same period of 2010. Display encompasses banner ads, digital video, rich media, and sponsorships. Digital video spending was up over 42 percent to $891 million in the first six months of this year.

“This category is beginning to become one of the more significant ones,” said PwC Partner David Silverman, of video advertising.

Like display, search grew about 27 percent in the first half, double the 2010 rate of 11.6 percent; it accounted for 49 percent of all Internet ad spending in the first half of this year. Lead generation ad spending rose around 25 percent, classified revenues fell 2 percent, and email spending was down by more than a third – 34 percent.

Retail, telecom, financial services, auto, and technology advertisers led the way in Internet ad spending in the first half.

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