Wednesday, April 7, 2010
Internet Ad Revenues Reach Record Quarterly High of $6.3 Billion in Q4 ’09

Slight Decline Year-on-Year to $22.7 Billion, Still A Bright Spot in Media Industry

NEW YORK, NY (April 7, 2010) – The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC) today released the IAB Internet Advertising Revenue Report for the full year 2009. Though U.S. Internet advertising revenues, at $22.7 billion for the year, showed a 3.4% decline from 2008, there are signs of an emergent recovery in the industry. The fourth quarter of 2009 hit a record quarterly high of $6.3 billion, a 2.6% increase year-over-year and a 14% increase over the third quarter of 2009.

Highlights of the report include:

  • Search and display-related advertising continue to represent the largest percentages of overall interactive advertising spend. Search revenues, comprising 47% of the total, amounted to nearly $10.7 billion for 2009, up slightly from 2008.
  • Display-related advertising—which includes display ads, rich media, digital video and sponsorship—totaled nearly $8 billion in 2009, showing an increase of 4% from 2008.
  •  One component of display-related advertising, digital video, continues to experience robust growth, with an almost 39% increase from 2008 to 2009.
  •  These latest revenue figures underscore the significant share shift taking place from traditional media to digital. Based on industry data from PwC from 2005 to 2009 in five key U.S. ad-supported media (television, radio, newspapers, consumers magazines and Internet), the Internet’s share of combined ad revenue grew from 8% to 17%.

“The latest IAB Internet Advertising Revenue Report makes clear that digital media are now a core component of successful advertising and marketing campaigns,” said Randall Rothenberg, President and CEO of the IAB. “As consumers spend more of their time immersed in digital media, marketers are increasingly reaching them there—building brands online and making digital the central force in their cross-media strategies.”

The record $6.3 billion spent on Internet advertising in the fourth quarter of 2009, while certainly aided by seasonal demand, is a strong indication that the worst of the economic impact on Internet advertising is over and that the seeds of growth have been planted,” said David Silverman, PwC Assurance partner.

The following data highlight key full year revenue data breakouts; dollar figures are rounded.

($ millions if not indicated):Advertising Formats: Search and Display-related ads continue to be leading formats.

 
FY 2009
FY 2008
Search
47% ($10,698)
45% ($10,546)
Display Related:
35% ($7,965)
33%($7,640)
    -Banner Ads
22% ($5,061)
21% ($4,877)
    -Rich Media
7% ($1,505)
7% ($1,642)
    -Digital Video
4% (1,017)
3%($734)
    -Sponsorship
2% ($383)
2%($387)
Classifieds
10% ($2,254)
14% ($3,174)
Referrals/Lead Generation
6% ($1,451)
7% ($1,700)
E-mail
1% ($292)
2% ($405)

The IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PricewaterhouseCoopers. The results are considered the most accurate measurement of interactive advertising revenues because the data is 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. The full report is issued twice yearly for full and half-year data, and top-line quarterly estimates are issued for the first and third quarters. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information.

A copy of the full report is available at: http://www.iab.net/AdRevenueReport

About PricewaterhouseCoopers:
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 140,000 people in 149 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

“PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

About the IAB:
The Interactive Advertising Bureau (IAB) is comprised of more than 460 leading media and technology companies who are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C.  For more information, please visit www.iab.net.

IAB Media Contact:
Marla Aaron
212.380.4714
[email protected]

PricewaterhouseCoopers Media Contact:
Steven Silber
646.471.4059
[email protected]