At the Mixx Show yesterday, the IAB and PricewaterhouseCoopers announced that Internet ad revenues are up 26% from last year -- just for the first half of 2005:
Internet advertising revenues (U.S.) for the first six months of 2005 were approximately $5.8 billion, a new record and a 26% increase over the first half of 2004. Internet advertising revenue totaled $2.985 billion, just shy of $3 billion for the second quarter of 2005, representing a 26% increase over same period 2004. Q2 2005 revenues represent a 6.6% increase over Q1 2005.
Search is the clear rev-gen leader, earning twice as much as display ads online.
We can all guess why - it's been said a thousand times before (on this blog and elsewhere), and it's the reason most CMOs burn out within 3 years: accountability. We're getting more bang for the buck online, and we can show clients or bosses exactly how effectively their money is being spent. The price of one half-page ad in any worthwhile newspaper that may or may not get results (and can't really be 'tweaked') will buy a medium-sized business a few month's worth of search engine media, which can be edited on the fly, turned off when no one's looking, and capped when it gets near the budget. Additionally, search appeals to consumers and business looking to BUY.
That said, other online media is fueling the growth, as well. Here's the breakdown:
Ad Formats – Internet ad revenues broken down by ad formats are:
| FH 2005 | FH 2004 | |
| Search | 40% ($2,315) | 40% ($1,817) |
| Display Ads | 20% ($1,157) | 20% ($942) |
| Classifieds | 18% (1,041) | 17% ($782) |
| Rich Media | 8% ($463) | 8% ($368) |
| Referrals/Lead Generation* | 6% ($347) | 2% ($114) |
| Sponsorships | 5% ($317) | 9% ($414) |
| 2% ($116) | 2% ($70) | |
| Slotting Fees | 1% ($58) | 2% ($92) |
*Renamed category in 2005 specifically including Lead Generation activity; 2004 referred to simply as “Referrals”
There's plenty more data available. See the press release on the IAB Web site.
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