Online Ad Revenues Reach $10 Billion In First Half Of 2007, Search Remains Largest Single Category

Oct 5, 2007 at 9:39am ET by Greg Sterling

The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) released online advertising figures for the second quarter and the first six months of 2007. For the first time, revenues exceeded $5 billion in a single quarter and first half revenues reached $10 billion, compared with $7.9 the previous year. Year-over-year growth was about 26 percent.

Search, the largest single category of online ad revenue, grew a modest point to 41 percent of all online revenues in FH 2007, compared with 40 percent during the same period in FH 2006. But the actual dollars were larger, at $4,097 for FH 2007, compared with $3,164 a year ago.

The rest of online advertising maintained basically the same distribution across ad categories. According to the IAB/PwC:

Chart source: IAB/PwC

Ad revenues remained “concentrated with the ten leading ad-selling companies, which accounted for 70 percent of total revenues in the second quarter of 2007, down slightly from 71 percent reported for the second quarter of 2006,” according to the IAB report. In one slight shift, performance-based advertising traded places with CPM advertising as the leading pricing model.

Full year online ad spending for 2006 was $16.9 billion; 2007 is on track to break $20 billion. Assuming that happens, it would bring US paid search advertising in at roughly $8.2 billion for the year, compared with $6.8 billion for 2006.

Greg Sterling is a Contributing Editor at Search Engine Land, and writes a personal blog Screenwerk, examining the broader world of media and advertising. He also posts at a Local Mobile Search, which is focused on the mobile Internet.

See more articles by Greg Sterling >

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