Recording the highest quarterly result ever, domestic online ad revenues hit $6.4 billion in the third quarter of the year, according to new data from the Interactive Advertising Bureau and PricewaterhouseCoopers. Year-over-year, online ad revenues were up 17%.
"Advertisers are shifting more of their brand messaging online, accounting for this welcome surge in a difficult economy," said David Silverman, a partner at PwC. "This trend reflects the accelerating shift in consumer behavior towards the Internet and away from traditional media."
As a result, spending on Internet advertising continues to reach new heights. Just last month, the IAB and PwC said domestic online ad revenues hit $12.1 billion during the first half of the year, which set a new record and represented an 11.3% increase year-over-year. The previous industry record was set in the fourth quarter of 2009, when Internet advertising revenues in the U.S. climbed to $6.3 billion.
In particular, digital video ad growth continues to outpace the market overall -- climbing 31% in the first half of 2010, according to the IAB and PwC. Digital video ad revenues accounted for $627 million for the first six months of the year -- up from $477 for the first half of 2009.
Overall, however, digital still made up just 5% of the overall ad market during the first half of the year, which represented about $12 billion.
Search advertising remained the dominant form of online advertising with a 47% share, accounting for $5.7 billion during the first half of the year -- up 11.6% year-over-year. Banner ads followed with a 23% share at $2.7 billion -- up 14.6% over a year ago -- while rich media was just ahead of digital video and referral/lead generation advertising, with $743 million during the first half of the year.
With the notable exception of 2009, IAB's ad spending estimates have consistently grown since the start of the decade. "The Internet has transformed consumers' lives and how they experience entertainment, information and brands," said Randall Rothenberg, president and CEO, IAB. "Marketers have embraced digital media because that's where they can engage with their consumers."