Internet Ad Revenues at Nearly $15 Billion in First-Half 2011, Up 23%, Second Quarter 2011 Breaks Record Again

Display and Search Advertising Both Grow 27%, With Digital Video & Sponsorships the Fastest-Growing Formats

NEW YORK--()--Internet ad revenues rose 23.2 percent — to a record $14.9 billion — in the first half of 2011, according to figures released today by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC US). The rate of growth more than doubled year-over-year, as last year’s first-half ad revenues of $12.1 billion had represented an 11.3 percent increase over 2009.

Internet ad revenues for the second quarter alone also reached new heights, increasing 24.1 percent to $7.7 billion. That performance compares to last year’s same-period revenues of $6.2 billion, up 13.9 percent from 2009.

Display-related advertising — which includes banner ads, rich media, digital video and sponsorships — totaled more than $5.5 billion in the first six months of 2011. Display increased 27.1 percent over the same period in 2010, substantially exceeding the previous year’s growth rate of 16 percent. Digital video once again commanded double-digit growth — up 42.1 percent over a year ago, and moved close to the $1 billion mark with $891 million in half year 2011 revenue.

Display accounted for 37 percent of all interactive spend in the first half of 2011, with search remaining the leading online category at 49 percent of the total — nearly $7.3 billion. Search and Display each grew about 27 percent year-over-year, with Search more than doubling its previous year’s growth rate of 11.6 percent.

In other online ad formats, dollars spent on lead generation increased 25.4 percent over the same period in 2010, but classified ad dollars were down 2 percent and email spend decreased 34.2 percent.

IAB and PwC US looked at revenue models supporting online ads. Ads using performance-based models increased faster than ads using impression-based models, rising to $9.6 billion. Impression-based ad spend did grow by 10.8 percent, though that pricing model accounted for only 31 percent of total ads, down from 35 percent year-over-year.

“The remarkably resilient performance of interactive advertising so far in 2011 demonstrates that more marketers are placing big bets on digital to tell their brand stories," said Randall Rothenberg, President and CEO, IAB. “This welcome news, in light of the weakness in a large part of the rest of the U.S. economy, confirms that the innovations happening in interactive marketing deliver great value to the industry and to the consumer.”

“Strong online advertising growth has continued into the first half of 2011,” said David Silverman, a partner at PricewaterhouseCoopers LLP. “Fueling this growth is the ability of advertisers to correlate performance and results with the dollars they are investing.”

“These figures build upon the positive news we saw in the 2010 year-end revenue report,” said Sherrill Mane, Senior Vice President, Industry Services, IAB. “It’s a clear signal that all of us in the interactive advertising industry are delivering meaningful results to marketers -- and that they are confident in investing in interactive.”

Annual Figures

The following chart highlights half-year Internet ad revenue since the IAB began measurements in 1996; dollar figures are rounded.

      Year     % Growth
HY 11     $14,941     23%
HY 10     $12,127     11%
HY 09     $10,900     -5%
HY 08     $11,510     15%
HY 07     $9,993     26%
HY 06     $7,909     37%
HY 05     $5,787     26%
HY 04     $4,599     40%
HY 03     $3,292     11%
HY 02     $2,978     -20%
HY 01*     $3,720     -7%
HY 00*     $4,013     147%
HY 99     $1,627     110%
HY 98     $774     125%
HY 97     $344     320%
HY 96     $82      
     

---------

     
Total     $94,596      

Ad Category Breakouts (in millions)

 
      HY 2011     HY 2010
Search     49% ($7,286)     47% ($5,747)
Display Related:     37% ($5,535)     36% ($4,356)
-Banner Ads     23% ($3,414)     23% ($2,744)
-Digital Video     6% ($891)     5% ($627)
-Rich Media     5% ($763)     6% ($743)
-Sponsorship     3% ($467)     2% ($242)
Classifieds     8% ($1,237)     10% ($1,262)
Referrals/Lead Generation     5% ($805)     5% ($642)
E-mail     1% ($79)     1% ($120)
       

Revenue Pricing Models (in millions)

 
     

HY 2011

   

HY 2010

Performance-Based

   

64% ($9,588)

   

61% ($7,410)

Impression-Based

   

31% ($4,668)

   

35% ($4,213)

Hybrid

   

5% ($686)

   

4% ($505)

The IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the Internet Media Group of PwC US. The results are considered the most accurate measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertising on the Internet. The survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising.

The full report is issued twice yearly for full and half-year data, and top-line quarterly estimates are issued for the first and third quarters. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information. Past reports are available at www.iab.net/AdRevenueReport.

About the IAB

The Interactive Advertising Bureau (IAB) is comprised of more than 500 leading media and technology companies who are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C. For more information, please visit www.iab.net.

About the PwC Network

PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information.

© 2011 PwC. All rights reserved. “PwC” and “PwC US” refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate and independent legal entity.

Contacts

IAB Media
Laura Goldberg, 347-683-1859
laura.goldberg@iab.net
or
PwC Media
Steven Silber, 646-471-4059
steven.g.silber@us.pwc.com

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Contacts

IAB Media
Laura Goldberg, 347-683-1859
laura.goldberg@iab.net
or
PwC Media
Steven Silber, 646-471-4059
steven.g.silber@us.pwc.com