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October 4, 2007
Historic Internet Advertising Revenues: First Half of ’07 Hits $10 billion, Q2 ’07 Exceeds $5 Billion for First Time

The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) released the IAB Internet Advertising Revenue Report covering the second quarter and the first six months of 2007. Internet advertising revenues (U.S.) for the first six months of 2007 were nearly $10 billion, setting yet another new record and representing a nearly 27 percent increase over the first half of 2006. Internet advertising revenue totaled nearly $5.1 billion for the second quarter of 2007, exceeding the $5 billion mark for the first time in a quarter, a 25.4 percent increase over the same period in 2006.

"The torrid growth of interactive advertising revenue persists and these results are really no surprise but very welcome news," said Randall Rothenberg, president and CEO of the Interactive Advertising Bureau. "More and more marketers have embraced the reality that interactive is the fulcrum on which their brand strategies need to be based and we expect robust growth to continue."

'The first six months of 2007 has continued the trend over the past several years of strong sequential growth," said David Silverman, partner, Entertainment, Media & Communications Practice, PricewaterhouseCoopers. "The growth, which was led by strong increases in the consumer advertising sector, continues to point to the mainstream acceptance of the medium and advertisers' continuing reliance on it."

"The Internet is well established as a key media distribution channel for driving advertising," said Pete Petrusky, Director, Entertainment, Media & Communications Practice, PricewaterhouseCoopers. "The recent results demonstrate that advertisers recognize the continued growth in the online audience and the growing opportunity to target and monetize that audience."

Advertising Formats - Search and Display continue to be leading formats.

 

FH 2006

FH 2007

Search

40% ($3,164)

41% ($4,097)

Classifieds

20% ($1,582)

17% ($1,699)

Referrals/Lead Generation

7%($592)

8% ($799)

E-mail

2% ($158)

2% ($200)

Display Related:

31% ($2,413)

32%($3,198)

– Rich Media (Includes Video)

6% ($475)

8%($799)

– Ad Banners / Display Ads

21% ($1,622)

21%($2,099)

– Sponsorships

4% ($316)

3% ($300)

– Slotting Fees

<1% (<1$)

<1% (<$1)

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

 

FH 2006

FH 2007

Top 10

71%

70%

Top 25

84%

82%

Top 50

94%

91%

Pricing Models – Performance deals are now the leading pricing models, followed closely by CPM deals.

 

FH 2006

FH 2007

CPM

48% ($3,797)

45%($4,497)

Performance Deals

47% ($3,717)

50%($4,997)

Hybrid

5% ($395)

5% ($499)

The IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PricewaterhouseCoopers. 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.

A copy of the full report is available at www.iab.net/pwc_half_year_2007 »

Read the Internet Advertising Revenues Continue to Soar, Reach Nearly $10 Billion in First Half of '07 press release »

For Q1 information, read the First Quarter Interactive Advertising Revenue press release »

View all IAB Internet Advertising Revenue Reports