Online Advertising Hits Double Digit Growth

Internet advertising revenue in the United States reached $12.1 billion for the first half of the year, an 11.3% increase over the comparable period in 2009, and setting a new half-year record.

Display-related advertising -- including banner ads, rich media, digital video, and sponsorships -- added up to more than $4.4 billion for the first six months of 2010, representing growth of about 16% compared with the first six months of last year, according to a new report by the Interactive Advertising Bureau (IAB) and PwC US, a division of PricewaterhouseCoopers.

Digital video is experiencing record growth, increasing 31% this year vs. the same time last year, the report said. Search advertising dominates, representing 47% of the advertising market and $5.7 billion of overall spending for the first two quarters of 2010, an 11.6% increase year-over-year.

"Consumers' appetite for immersive online experiences is limitless as technological innovation and creativity give rise to new forms of entertainment and information in the digital age," said Randall Rothenberg, president and CEO of the IAB. "This report highlights marketers' ongoing adoption of interactive media to build brands -- and that's only going to continue."

Applying historical seasonal data, this makes 2010, on an annual run-rate, the highest annual revenue year for online advertising -- exceeding the $23.4 billion in 2008, the previous highest annual total, according to IAB and PwC.

In the second quarter, online ad sellers reported aggregate revenue totaling $6.2 billion, the study said, up $753 million compared with the second quarter of 2009 and $243 million from the first quarter of this year.

"With the strongest first half on record, 2010 has so far indicated that Internet advertising is back, and better than ever," said David Silverman, PwC Assurance partner. "While the recession clearly affected short-term growth in 2009, with double-digit growth in both search and display during the first six months of 2010, the long-term prospects continue to be strong."

The 10 leading ad-selling companies accounted for 70% of total revenue in the second quarter of 2010, down slightly from 71% in the same period last year. Companies ranked 11 to 25 accounted for 12% of revenue for the second quarter of this year, up from 11% in the second quarter of 2009. Those businesses ranked 26 to 50 accounted for 8% of ads in the second quarter of the year, compared with 7% in the same period 2009.