Studies See Sharp Growth in Web, Mobile-Based Ad Spend

Posted in News on October 25, 2010
IAB report shows growth in online advertising quarter-to-year-ago-quarter and quarter-to-quarter
IAB report shows growth in online advertising quarter-to-year-ago-quarter and quarter-to-quarter

Internet-based advertising set a six-month growth record through June of this year, according to a new report from Interactive Advertising Bureau (IAB) in conjunction with PricewaterhouseCoopers (PwC). Meanwhile, a separate report from media analyst SNL Kagan predicted that the overall U.S. ad market is poised for a recovery following a two-year downward trend, with mobile, Internet and broadcast television leading the way.

In its report “Advertising Forecasts: U.S. Market Trends and Data for All Major Media” released last month, SNL Kagan says that mobile, Internet and broadcast television will round out 2010 as the leaders in advertising growth. Spending on print media, including newspapers and business publications, continued to fall, said the analyst.

The report clearly shows the link between Internet bandwidth and online ad spending. In 1999 — just prior to the arrival of broadband Internet access — U.S.-based web advertising totaled $4.7 billion. By 2011, that figure will have ballooned to an estimated $27.8 billion, and could exceed $60 billion before the decade is out, say analysts.

The boom in emerging-media ad revenue will likely have a ripple effect, says SNL Kagan. In decline since 2008, the overall market is expected to rise 2.8 percent to $210.5 billion by the end of this year, while tacking on another $4 billion next year. By 2019 the market will reach $275.8 billion, says the analyst.

“New media, such as mobile and Internet advertising, continue to boom, while old media, particularly print, is increasingly losing its relevance,” concludes Derek Baine, SNL Kagan senior analyst. “Dollars are shifting into new platforms and those drawing the most eyeballs.”

Issued in early October, the IAB Internet Advertising Revenue Report found that online ad spending reached $12.1 billion during the first half of 2010, up 11.3 percent over the same period in 2009. In addition to setting a new half-year revenue mark, the figure represents the highest-ever web-based ad revenue total for a second quarter, or nearly 14 percent higher than Q2 in 2009.

Revenue generated by online display advertising — including rich media, digital video, banner ads and sponsorships — exceeded $4.4 billion during the first six months of 2010, up nearly 16 percent over 2009’s first half. While search-based advertising continued to account for the lion’s share of Internet advertising dollars, digital video showed the strongest growth, rising a remarkable 31 percent over the same period last year.

As technological innovations give rise to new forms of entertainment and information, demand for immersive online experiences appears to be limitless, says Randall Rothenberg, president and CEO of IAB. “The report highlights marketers’ ongoing adoption of interactive media to build brands — and that is only going to continue.”

“With the strongest first half on record, 2010 has so far indicated that Internet advertising is back, and better than ever,” adds David Silverman, assurance partner with PwC. “While the recession clearly affected short term growth in 2009, with double-digit growth in both search and display during the first six month of 2010, the long term prospects continue to be strong.”

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