Commentary

Online Ad Spend Surpasses $21B

Online ad revenue climbed to $21.2 billion last year, marking a 26% increase from 2006, the Interactive Advertising Bureau and PricewaterhouseCoopers reported today.

Though that's less than the 35% bump seen between 2005 and 2006, online is still growing at a rate far exceeding traditional advertising. "This achievement is a testament to the continued vitality of interactive. Explosive innovation in the industry is providing marketers with new and unique ways to reach consumers," Randall Rothenberg, president and CEO of the IAB, said in the report.

While search remains the single largest category of online ads, accounting for 41% of the total (up from 40% in 2006), display claimed a solid 21% (down from 22%).

Marketers spent 2% of their online ad dollars on digital video last year, marking the first time that Web video drew significant ad revenue. Sixteen percent of ad dollars were spent on classified ads, down from 18% in 2006. There's some indication that law enforcement actions against lead generation companies might be taking a toll on the space. Lead gen accounted for just 7% of the total online ad spend -- down from 8% the year before.

The IAB's report wasn't the only current indication that online media is still thriving. CBS today said it plans to acquire CNet for $1.8 billion cash, marking one of the largest media company consolidations in recent years. CBS is paying a 45% premium for CNet, which reported a $6.1 million loss in the first quarter.

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