IAB: Online ad spend up 11.3% in first half

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Internet advertising spending set new records during the second quarter of 2010, helped by spikes in display advertising, according to a tally from the Interactive Advertising Bureau.

Spending on online ads rose to $12.1 billion during the first half of 2010, up 11.3% from last year, while second-quarter spending was up 13.9%. According to the IAB Internet Advertising Revenue Report, both time periods set spending records.

“It's shaping up to be a very healthy year,” said Sherrill Mane, IAB's SVP for industry services. She noted the authors of the study at PriceWaterhouse Coopers pointed out that ad spending is historically lower in the first half of the year, so the numbers in the later half of 2010 could be even better.

“Just guesstimating, we could have a record year,” she said.

Search advertising is the largest segment of online ads, accounting for 47% of spending; it grew 11.6% to $5.75 billion during the first half. However, display advertising is picking up share of budgets, rising to 36% of ad dollars from 34% during the same time last year.

Spending on display ads grew 15.9% to $4.36 billion during the first half, with sponsorship and digital video both growing at rates of more than 31%. However, banner ads remain the largest segment of display ads, growing 14.6% to $2.74 billion

Spending on lead generation ($642 million) and e-mail ($120 million) dropped 11.8% and 19.5%, respectively, during the first half. Lead generation's share of ad spending dropped to 5% from 7% year-over-year. Classified advertising, which remained 10% of online ad spending, rose 13.1% to $1.26 billion.

“This report highlights marketers' ongoing adoption of interactive media to build brands — and that's only going to continue,” said IAB CEO Randall Rothenberg.

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