PwC, IAB: Internet Ad Revenues Soar, Reach Nearly $10 Billion in First Half

Internet advertising revenues (U.S.) for the first six months of 2007 were nearly $10 billion - up some 26 percent from $7.9 billion in the first half of 2006 - and yet another new record, according to the “IAB Internet Advertising Revenue Report” from the Interactive Advertising Bureau and PricewaterhouseCoopers, writes MarketingCharts.

Internet advertising revenue totaled nearly $5.1 billion in the second quarter of 2007 - for the first time exceeding the $5 billion mark in a quarter, IAB said; that was a 25.4 percent increase over the equivalent period in 2006, as well as a 4 percent increase from the $4.9 billion in the first quarter of 2007.

Search revenue accounted for 41 percent of 1H07 revenues, consistent with the equivalent period in 2006. Display advertising, the second-largest format, accounted for 32 percent, followed by Classifieds (17 percent) and Lead Generation (8 percent).

Other findings from the IAB/PwC report:

• Consumer-related internet advertising spend is still the largest category, accounting for 54 percent of 2007 second-quarter revenues, up from 49 percent for the equivalent period in 2006.

• Financial Services, the second-largest category, accounted for 15 percent; Computing advertisers followed with 11 percent.
• Within the Consumer category, the largest sub-categories in 2Q07 were Retail (46 percent), Automotive (21 percent), Leisure (13 percent) and Entertainment (9 percent).

• Online advertising remains concentrated with the 10 leading ad-selling companies, which accounted for 70 percent of total revenues in the second quarter of 2007.
• Companies ranked 11-25 accounted for 12 percent of revenues, and those ranked 26-50th accounted for 9 percent.

• Some 50 percent of 1H07 revenues were priced on a performance basis, up from 47 percent reported in 1H06.
• Some 45 percent of 1H07 revenues were priced on a CPM or impression basis, down from 48 percent for the same period in 2006.
• Some 5 percent of first half revenues were priced on a hybrid basis, unchanged from the equivalent period in 2006.

The full report from PwC/IAB is available here.