The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC) released the IAB Internet Advertising Revenue Report for the full year 2009. Though U.S. Internet advertising revenues, at $22.7 billion for the year, showed a 3.4% decline from 2008, there are signs of an emergent recovery in the industry. The fourth quarter of 2009 hit a record quarterly high of $6.3 billion, a 2.6% increase year-over-year and a 14% increase over the third quarter of 2009.

Some of the key findings in the IAB’s overview of the full-year included:

  • Search revenues made up 47 percent of the total, amounted to nearly $10.7 billion for 2009, up slightly from 2008.
  • Display-related advertising—which includes display ads, rich media, digital video and sponsorship—totaled nearly $8 billion in 2009, showing an increase of 4 percent from ‘08. Banner ads are far from dead as well, comprising 22 percent of ad spend, up slightly from 21 percent in ‘08. Classifieds, however, are clearly on the decline, representing 10 percent of the online ad market last year compared to 14 percent the year before. Lead gen also declined a bit going to 6 percent of the market in ‘09 from 7 percent in ‘08.
  • Within display, digital video, continued to record robust growth, gaining 39 percent in ‘09 over the previous year.

The following data highlight key full year revenue data breakouts; dollar figures are rounded.

($ millions if not indicated): Advertising Formats: Search and Display-related ads continue to be leading formats.

 

FY 2009

FY 2008

Search

47% ($10,698)

45% ($10,546)

Display Related:

35% ($7,965)

33%($7,640)

    -Banner Ads

22% ($5,061)

21% ($4,877)

    -Rich Media

7% ($1,505)

7% ($1,642)

    -Digital Video

4% (1,017)

3%($734)

    -Sponsorship

2% ($383)

2%($387)

Classifieds

10% ($2,254)

14% ($3,174)

Referrals/Lead Generation

6% ($1,451)

7% ($1,700)

E-mail

1% ($292)

2% ($405)

Taking a longer view of the shift from traditional to online, PwC’s data from 2005 to 2009 across major U.S. ad-supported media (TV, radio, newspapers, consumers magazines and the internet), online’s share of combined ad revenue grew from 8 percent to 17 percent.

IAB provided a general interpretation of the numbers and the state of online ad marketplace: While the forward march of dollars from traditional to digital appears ineluctable, there are some issues holding the industry back. After 15 years, the days of double digit growth rates are probably gone. Apart from the law of large numbers, inertia of the ad buying process is part of the reason to expect single digit increases over the next few years.

A copy of the full report is available at: http://www.iab.net/AdRevenueReport

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