Onlline Ad Revenues Accelerate at 37%; 1H 2006 Revenues Hit $7.9B

Internet advertising revenues (U.S.) for the first six months of 2006 were approximately $7.9 billion, a new record and a 37% increase over the first half of 2005, according to Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC). Internet advertising revenue totaled nearly $4.1billion for the second quarter of 2006, exceeding the $4 billion mark, representing a 36% increase over same period 2005. Q2 2006 revenues represent a 5.5% increase over Q1 2006.
Search, broadband, lead generation, behavioral targeting, consumer generated content and new emerging platforms like mobile and iPTV are powering this growth. 

The following highlights key revenue data breakouts; dollar figures are rounded ($ millions): 

Ad Formats – Internet ad revenues broken down by ad formats are ($ millions): 

  FH 2006 FH 2005
Search 40% ($3,164) 40% ($2,315)
Classifieds 20% ($1,582) 18% ($1,042)
Referrals/Lead Generation 8% ($633) 6% ($347) 
E-mail 2% ($158) 2% ($116)
Display Related 31% ($2,531) 34% ($1.968) 
    Rich Media 7% ($554)

8% ($463)

    Ad Banners / Display Ads 21% ($1,661)  

20% ($1,157)

    Sponsorships 4% ($316) 5% ($289)
    Slotting Fees <1% (<1$) 1% ($58)

Industry Concentration – Concentration of revenues by the top 10, top 25 and top 50 has remained consistent. 

  FH 2006 FH 2005 
Top 10 71% 72% 
Top 25 84% 87% 
Top 50  94%  96%

Pricing Models – CPM pricing continues to be the predominant choice for buyers and sellers, at a slight cost to Performance Deals and Hybrid. 

  FH 2006 FH 2005
CPM or Impression 48% ($3,796) 48% ($2,778)
Performance Deals 47% ($3,717) 40% ($2,315)
Hybrid 5% ($395) 12% ($694)

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