• by Joe Mandese  @mp_joemandese, September 15, 2010

The top 10 U.S. sex sites will generate an estimated $63 million in advertising revenues during 2010, according to a new report released by the AIM Group this morning. The report, "Sex Ads: Where The Money Is," is being released on the cusp of a U.S. House Judiciary Subcommittee meeting on the sex trafficking of minors, and indicates that Craigslist's decision to pull out of the "adult services" trade is altering the online sex advertising marketplace.

Ads for prostitutes and adult escort services generate "a ton of money," says AIM Group Founder Peter Zollman, noting that, if anything, the group's estimates are "extremely conservative," and that the actual market for online sex ads is much greater.

The Web sites AIM Group analyzed "offer tens of thousands of ads for sex services every day, and many of the second-tier sites are working hard to grab revenue that Craigslist has given up," Zollman states.

Following public scrutiny and potential regulatory pressure, Craigslist pulled out of the adult services advertising business on Sept. 3, a move AIM estimates will cost the site as much as $15 million in prostitution advertising revenues this year. AIM estimates that Craigslist's annual prostitution ad revenues were about $45 million.

AIM says it has been tracking the market since 2003 at the request of an anonymous private non-profit foundation that fights sex trafficking in children and women.

AIM projects that the nine other top 10 sites after Craigslist will generate nearly $33 million this year from an array of sex service ads offering "body rubs," "escort services" and similar thinly disguised prostitution services.

Backpage.com, operated by Village Voice Media, will generate an estimated $17.5 million in online and print prostitution advertising in 2010, AIM projects, making it a distant No. 2 to market leader Craigslist.

Two other sites generated estimated listings revenue of $5.4 million and $2.6 million, with still more revenue from banner ads and other "erotic" services.

"There are hundreds of Web sites where prostitutes advertise, and many of them are likely to grow as the effects of the Craigslist decision play out," Zollman predicts. AIM cited the example of an ad published on Backpage.com that promoted a three-step process for posting ads for $5 on a relatively new site for "adult services."