IAB: PPC And Search Gain In Q4, FY08 Online Ad Revs At $23B

According to data released yesterday by the IAB/PwC on Q4 and full year 2008 online advertising revenues, performance-based advertising and search gained while other segments declined slightly or were flat. Overall, online advertising grew 10.6% in 2008 to reach $23.4 billion. US online ad revenue in Q4 was $6.1 billion, up from $5.8 billion in the third quarter of last year. Especially noteworthy for the readers of this blog, search ad revenues comprised 46 percent of Q4 online ad revenues, up from 42 percent a year ago.

Here are a selection of charts from the report:

For all the talk of the collapse of display, usage remained constant in 2008 vs. 2007. By contrast, rich media and video lost share and so did classifieds, which has continued to lose share over the past four years. Also worthy of note is the big jump in performance based ads vs. CPM pricing. What that means is that more marketers were buying display advertising on a PPC basis. It also reflects the strength of search marketing at a time of economic uncertainty.

On a related note, eMarketer publishes some of SEMPO’s numbers regarding the breakdown of spending in the search market in 2008:

SEMPO’s survey data and projections indicate that $13.5 billion was spent on SEM last year. This is a broader category than the IAB’s search category; it includes technology and SEO-related spending. It also includes fees and costs not reflected in direct ad spending. The IAB and SEMPO numbers don’t line up but the different definitions of the market could help account for the relatively sizable discrepancy between the IAB 2008 search revenue number ($10.5 billion) and SEMPO’s SEM spending figure ($13.5 billion).

Related Topics: Channel: SEM | Search Ads: General | Search Marketing: General | SEM Industry: General | SEM Industry: Stats | Stats: Size | Stats: Spend Projections

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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