Internet Ads Reach $15 Billion, First-Half 2011

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Internet ad revenue rose 24.1% to $7.7 billion in Q2 2011, contributing a 23% uptick to $14.9 billion in the first half of the year, according to the Interactive Advertising Bureau and PricewaterhouseCoopers U.S. stats.

Display-related advertising-banner, rich media, digital video and sponsorships rose 27.1% to more than $5.5 billion in the first six months of 2011.

Breaking it down for the first six months, display-related advertising revenue totaled $5.5 billion or 37% revenue, up 27% from the $4.4 billion reported in 2010. Banners took 23%, or $3.4 billion; rich media, 5%, or $763 million; digital video, 6%, or $891 million; and sponsorship, 3%, or $467 million.

Aside from display ads, paid search ads continue to take the majority of the media buy. Search -- which remains the leading format since 2006 -- accounted for 49% of Q2 2011 revenue, up 47% to $3.8 billion. Search revenue for the first six months of 2011 totaled $7.3 billion, up 27% from $5.7 billion in 2010.

Brands also spent more on video and lead generation. Digital video rose 42.1% to $891 million. Lead generation grew 25.4%, compared with the first six months in 2010, accounting for 5% during the first six months of 2011, or $805 million.

While some ad formats continue an uphill climb, others slid. The dollars spent on classified ads fell 2%; and email, 34.2%, only contributing 1%, or $79 million, to revenue.

Ads using performance-based models increased faster than ads using impression-based models, rising to $9.6 billion. In Q2 2011, approximately 64% of revenue came in priced on a performance basis, up from 61% reported in Q2 2010. About 31% of Q2 2011 revenue was priced on CPM or an impression basis -- down from 35% -- and 5% of Q2 2011 revenue priced on a hybrid basis, up from the 4% reports in the year-ago quarter.

The study identifies the retail sector as the biggest spenders online. Retail advertisers accounted for 23% during the first half of 2011, or $3.5 billion -- up from $2.5 billion in the first six months of the prior year. Telecom companies followed, contributing 14%, or $2.1 billion, up from $1.7 billion; Financial Services, 13%, or $1.9 billion, up from 12%; and Automotive advertisers, 11%, or $1.7 billion, up from $1.3 billion.

When it came to the computing sector, revenue rose 10%, or $1.5 billion, up from $1.2 billion; leisure travel, 8%, or $1.2 billion, up from 7%; consumer packaged goods, 6%, or $866 million, down from $980 million; entertainment, 4%, or $556 million, up from $508 million; media, 4%, or $660 million, up from $498 million; and pharma/ healthcare, 4%, or $608 million, up from $576 million.

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