Online Ads Hit $8.4 Bil, Mobile Dollars Double

by Gavin O'Malley, Jun 11, 2012, 3:41 PM

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The Web might be a maturing medium, but online ad revenue shows little sign of leveling off.

On the contrary, Internet ad revenue for the first quarter of the year set a new record (for the reporting period) at $8.4 billion -- which represented a 15% increase year-over-year, according to new data from the Interactive Advertising Bureau PricewaterhouseCoopers.

For various reasons -- from improved delivery and platform technologies to better content and greater consumer familiarity -- the continued success of online advertising is undeniable, according to Sherrill Mane, SVP of research, analytics and measurement at the IAB.

“Digital media captures consumers’ imaginations, and marketers increasingly turn to interactive advertising to successfully speak to their customers,” said Mane.

Beating 2012’s growth to date, Internet ad spending grew 22% in 2011 to $31.7 billion, the IAB and PwC U.S. found.

That growth rate topped 2010’s rate of 14.5%, leading many to assume that digital advertising had recovered from a recession-induced setback in 2009.

For the fourth quarter of 2011, online ad spending hit nearly $9 billion -- up 20.4% from a year ago, and 14.7% from the third quarter.

The IAB said mobile advertising -- which it began tracking in 2010 for the first time -- was the fastest-growing category in 2011, jumping 149% to $1.6 billion from $641 million in 2010. Mobile also doubled from 2.5% to 5% of total online ad dollars this year.

Digital video advertising -- which the IAB includes as part of display advertising -- saw strong growth as well, rising 29% from $1.4 billion to $1.8 billion. Overall, display spending rose 15% in 2011 from $9.6 billion to $11.1 billion.

Search advertising enjoyed even bigger gains, growing 27% from $11.7 billion to $14.8 billion. It continued to make up the largest proportion of online ad spend: at 46.5%, up from 44.8% in 2010. That increase came at the expense of display, which declined from 37% in 2010 to 34.8% last year.

Retail advertising remained the largest category of Internet ad spending, totallng 22% in 2011, or $7.1 billion, up slightly from 21% ($5.5 billion).

Financial services accounted for 13% ($4.1 billion), telecom, 12% ($3.9 billion), automotive, 11% ($2.9 billion), leisure travel, 8% ($2.4 billion), and computing 8% ($2.7 billion). Those proportions all held steady through 2011, varying only by a percentage point.

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