Online Ad Revenues Break Records In 2008Online Ad Revenues Break Records In 2008

Internet advertising drew record revenue for the fifth consecutive year in 2008, according to the Interactive Advertising Bureau.

IAB on Monday released its 2008 Internet Advertising Revenue Report, which said that Internet ad revenue in the United States reached $23.45 billion last year, up $2.25 billion, or about 10.6% from the record of $21.2 billion in 2007.

IAB and PricewaterhouseCoopers found that interactive advertising continued to grow, although at a slower pace than last year. Internet ad revenue also broke a record in the fourth quarter of '08 at $6.1 billion, marking the first time online advertising hit and passed the $6 billion mark in a single quarter. Revenue was $5.95 billion in the fourth quarter of 2007.

IAB cited Nielsen figures that showed that overall U.S. advertising dropped 2.6% in 2008 compared with the previous year, according to the report.

"We are seeing an ongoing secular shift from traditional to online media as marketers recognize that ad dollars invested in interactive media are effective at influencing consumers and delivering measurable results," Randall Rothenberg, president and CEO of the IAB, said in a statement release Monday. "In this uncertain economy, where marketers know they need to do more with less, interactive advertising provides the tools for them to build deep, engaging relationships with consumers -- the experience marketers gain from this will deliver dividends especially after the economy turns around."

Search accounted for 45% of Internet ad revenue in 2008, compared with 43% in 2007, according to the report. Display ads held steady, accounting for 33% of the Internet ad revenue in 2008.

Retail, financial services, computing, and automotive represented the largest verticals for the second year in a row, while consumer packaged goods increased its share by 60% from 2007 to 2008, according to the report.

The Internet is now the third largest ad-supported medium, marking its increasing significance to marketers and consumers.

"Though some categories in the fourth quarter slowed or even dipped, reflecting the current economic challenges, the overall performance is up, confirming interactive's ever-growing importance to the successful marketing mix," said David Silverman, partner, assurance, at PricewaterhouseCoopers.

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