IAB/PwC: Record Internet Ad Revenues for Q4 and Full-Year 2006

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U.S. internet advertising revenues continued to grow, totaling $16.9 billion in 2006 - a new annual record - growing 35% from 2005, according to the Internet Advertising Revenue Report released today (via MarketingCharts) by the Interactive Advertising Bureau and PricewaterhouseCoopers LLP.

Moreover, in the fourth quarter of 2006, revenues totaled $4.8 billion - a new quarterly record - and a 35% increase over the fourth quarter of 2005.

Consumer advertisers still constitute the largest category of internet advertising spending; and search, display, classifieds and lead generation all continue to grow at a healthy rate, with an increase in both performance-based and CPM or impression-based pricing, according to the report.

Some key full-year 2006 findings from the IAB report:

• Consumer-related advertisers accounted for 52% of 2006 internet ad revenues, up from 51% from 2005.
• Within the Consumer category the biggest sub-categories are Retail (47% of 2006 consumer revenue category), Automotive (22%), Leisure (13%), Entertainment (8%) and Packaged Goods (8%).
• Financial Services, the second-largest category, accounted for 16%, followed by Computing advertisers at 10%.
• Search revenue accounted for 40% of 2006 revenues, slightly less than the 41% for 2005.
• Display advertising, Classifieds, and Referrals accounted for 32%, 18%, and 8% of 2006 revenues, respectively.
• Survey participants reported that some 5% of 2006 full-year revenues were priced on a hybrid basis, down from 13% in 2005.
• About 47% of 2006 revenues were priced on a performance basis, up from 41% for 2005.
• Approximately 48% of revenues were priced on a CPM or impression basis, up from 46% in 2005.
• Internet advertising revenues accounted for approximately 5.9% of total U.S. ad spending in 2006, up from approximately 4.7% in 2005.

More charts pulled together from report data are available at MarketingCharts.