Internet Advertising Revenues Top $21 Billion in ’07, Reaching Record High

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Related Link: http://www.iab.net/media/file/IAB_PwC_2007_full_year.pdf

 May 15, 2008

Q4 ’07 Revenues Total $5.9 Billion; Unabated Growth Defies Other Economic Trends

New York, NY (May 15, 2008) – The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC) today announced that the 2007 Internet Advertising Revenue Report shows Internet advertising revenues in the U.S. continued their upward climb.

• For the full year 2007, revenues totaled $21.2 billion, exceeding 2006 performance by 26 %, itself the former record year.
• Q4 2007 Internet advertising revenues hit $5.9 billion, representing historic revenues for a single quarter and a 24% increase over the same period in 2006.
• This is the fourth consecutive year and 13th consecutive quarter of record results.

“This achievement is a testament to the continued vitality of interactive,” said Randall Rothenberg, president and CEO of the IAB. “Explosive innovation in the industry is providing marketers with new and unique ways to reach consumers—it’s a very exciting time.”

Search, display, classifieds and lead generation all continued growing at a healthy rate, according to the report. Consumer advertisers remained the largest category of Internet advertising spending, at 55% of 2007 full-year revenues, up from 52% from the full year 2006.

“Despite the current state of economic uncertainty, 2007 was another record year and the 13th consecutive record quarter. Interactive advertising is not just the future, it is the here and now, as it represents a meaningful and growing component of U.S. advertising and marketing spend,” said David Silverman, partner, Assurance, PricewaterhouseCoopers.

ADVERTISING FORMATS	2007		2006
Type of Advertising	$	% share of market	$	% share of market
Display Advertising	4,455	21%	3,685	22%
Sponsorship	636	3%	496	3%
Rich Media (06 including Broadband Video)	1,657	8%	1,192	7%
Digital Video (07 only)	324	2%		21%
All Display	7,072	34%	5,373	32%
Keyword Search	8,805	41%	6,799	40%
Classifieds	3,321	16%	3,059	18%
E-mail	424	2%	338	2%
Lead Generation*	1,584	7%	1,310	8%
TOTALS:	21,206	100%	16,879	100%

INDUSTRY CONCENTRATION

	FY 2007	FY 2006
Top 10	69% ($14,632)	69% ($11,647)
Top 25	80% ($16,965)	82% ($13,841)
Top 50	89% ($18,873)	92% ($15,529)

PRICING MODELS

	FY 2007	FY 2006
CPM or Impression	45% ($9,492)	48% ($8,102)
Performance Deals	51% ($10,817)	47% ($7,933)
Hybrid	4% ($897)	5% ($844)

Conducted by the New Media Group of PricewaterhouseCoopers, the Internet Advertising Revenue Report was launched in 1996 by the IAB, and aggregates data from all companies that report meaningful online advertising revenues. The results are considered the most accurate measurement of interactive advertising revenues with the data 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. First and third quarter revenue reports are estimates, with the actual figures being released along with second and fourth quarter data respectively. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information.  

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