Search accounts for 40% of US online ad revenue

The Interactive Advertising Bureau (IAB) releases the 2006 Internet Advertising Revenue report.

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IAB The Interactive Advertising Bureau (IAB) has released its 2006 Internet Advertising Revenue Report, looking at online advertising spend in the US.

The report shows that online ad spend rose by 35% compared with 2005, reaching a total figure of $16.9bn (£8.5bn). Online ad revenues for the last quarter of 2006 set a new record, at $4.8bn.

For the third year running, online ad spend figures have hit record levels. Randall Rothenberg, President and CEO, IAB believes this trend will continue:

“Interactive advertising revenues continue to show solid growth as advertisers and agencies recognize that it is a medium that can uniquely impact consumer behavior from product awareness, to purchase intent, to actual purchase and then brand loyalty.”

“We have every confidence that this growth trend will continue as marketers allocate more of their total marketing dollars to interactive and the industry delivers effective and innovative platforms for connecting with consumers.”

Search advertising took the largest proportion of ad revenues, at 40%, which is slightly down from 2005’s 41%. However, revenues from search advertising rose by 31% from $5.1bn in 2005 to $6.8bn in 2006.

In the IAB’s online ad spend figures for the UK last year, paid search accounted for a 57.8% share of the online market, with £1.2bn in revenues.

Other figures from the report:

  • Internet ad revenue accounted for 5.9% of total US ad spending in 2006. This is a lower proportion then in the UK, where online ad spend accounted for 11.4% of all ad revenues.
  • Display advertising made up 32% of revenue, classifieds 18%, and lead generation 8%.

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