Internet advertising revenues in the U.S. remain strong, topping $23 billion, according to the 2008 Internet Advertising Revenue Report, released by the Interactive Advertising Bureau and PricewaterhouseCoopers. Despite a difficult U.S. economy, interactive advertising’s continued growth, albeit at a slower pace, confirms marketers’ increased recognition of the medium’s value in reaching consumers online where they are spending more and more of their time.
Internet ad revenue in the U.S. totaled $6.1 billion in Q4, an increase of 4.5% from the 2008 Q3 total of $5.8 billion, and an increase of 2.6% from the 2007 fourth-quarter total of $5.9 billion. Full year Internet advertising revenues of 2008 totaled $23.4 billion, up 10.6% from the $21.2 billion reported in 2007.
“We are seeing an ongoing secular shift from traditional to online media as marketers recognize that ad dollars invested in interactive media are effective at influencing consumers and delivering measurable results,” said Randall Rothenberg, President and CEO, IAB. “In this uncertain economy, where marketers know they need to do more with less, interactive advertising provides the tools for them to build deep, engaging relationships with consumers—the experience marketers gain from this will deliver dividends especially after the economy turns around.”
Search revenue accounted for 46% of 2008 Q4 revenues, up from the 42% reported in 2007. Display Banner advertising, the second largest format, accounted for 21%, followed by Classifieds (13%), Lead Generation (7%) and Rich Media (7%) of Q4 revenues.
Search revenues accounted for 46% of 2008 Q4 revenues, up from the 42% reported for the same period in 2007. Search revenues totaled $2.8 billion in the fourth quarter of 2008, up 13% from the fourth quarter of 2007, when Search revenues totaled $2.5 billion.
Display-related advertising accounted for $2.0 billion or 33% of total revenues during the fourth quarter of 2008, down nearly 4.3% from the $2.1 billion (35% of total) reported in the fourth quarter of 2007. Display-related advertising includes Display Banner Ads (21% of 2008 Q4 revenues or $1.3 billion), Rich Media (7% or $434 million), Digital Video (3% or $207 million), and Sponsorship (1% or $87 million).
Classifieds revenues totaled $769 million or 13% of 2008 fourth-quarter revenues, down 8% from the $832 million (14% of total) reported in the fourth quarter of 2007.
Lead Generation revenues accounted for 7% of the 2008 fourth-quarter revenues or $433 million, up 4% from the $416 million (7%) reported in the fourth quarter of 2007.
For FY, Search remains the largest revenue format, accounting for 45% of 2008 full year revenues, up from the 41% reported in 2007. Search revenues totaled $10.5 billion for the full year 2008, up 20% from the $8.8 billion reported in 2007.
Display-related advertising revenues totaled $7.6 billion or 33% of full year 2008 revenues, up nearly 8% from the $7.1 billion (34% of total) reported in 2007. Display-related advertising includes Display Banner Ads (21% of 2008 full year revenues or $4.9 billion), Rich Media (7% or $1.6 billion), Digital Video (3% or $734 million), and Sponsorship (2% or $387 million).
Classifieds revenues accounted for 14% of 2008 full year revenues or $3.2 billion, down 4% from the $3.3 billion (16% of total) reported in 2007.
Lead Generation revenues accounted for 7% of 2008 full year revenues or $1.7 billion, up 6% from the $1.6 billion (7%) reported in 2007.
Retail advertisers continue to represent the largest category of Internet ad spending, accounting for 22% of revenues for the full year of 2008 or $5.0 billion, down from the 25% ($5.4 billion) reported in 2007.
Financial Services advertisers represented the second-largest category of spending at 13% of 2008 full year revenues or $3.0 billion, down from the 15% ($3.2 billion) reported in 2007.
Automotive advertisers accounted for the third-largest category of spending at 12% of 2008 full year revenues or $2.8 billion, up slightly from the 12% ($2.5 billion) reported in 2007.
Computing advertisers represented the fourth-largest category of spending at 12% of 2008 full year revenues or $2.7 billion, up slightly from the 11% reported ($2.3 billion) for the full year of 2007.
Telecom companies accounted for 9% of 2008 full year revenues or $2.0 billion, up slightly from the 8% ($1.7 billion) reported in 2007, while Leisure Travel (airfare, hotels & resorts) accounted for 6% of revenues ($1.4 billion) compared to the 7% or $1.5 billion reported in 2007.
Media accounted for 5% of revenues for the full year of 2008 or $1.3 billion, down slightly from the 6% ($1.3 billion) reported in 2007.
Consumer Packaged Goods and Food Products represented 6% of full year revenues ($1.5 billion) up from the 4% or $925 million reported in 2007. Entertainment accounted for at 4% of 2008 full year revenues ($917 million), down slightly from the 5% ($1.0 billion) reported in 2007.
