Report: Internet ad revenues hit $31 billion

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Sherrill Mane, IAB's SVP, research analytics and measurement
Sherrill Mane, IAB's SVP, research analytics and measurement

Online ad revenue for 2011 reached a historic high of $31 billion, according to the International Advertising Bureau's (IAB) Internet Advertising Revenue report, published April 18. That number is a 22% increase over 2010's full-year figure of $26 billion, which was also a record-topping figure.

David Silverman, partner at PricewaterhouseCoopers (PwC), which prepared the report, said mobile was the big story for the year. Mobile registered 149% growth to $1.6 billion, compared with $641 million the previous year. He said mobile, while still a small share of total digital dollars, is expected to continue to grow.

“What's happening is a confluence of the need for more value and the fact [that advertisers and marketers] have to be where the eyeballs, people and emotions are,” said Sherrill Mane, SVP of research analytics and measurement at IAB. “Consumers are embracing digital on all types of platforms and marketers have to follow…Money is migrating.”

Mane said she was not surprised internet advertising increased, considering the increase in digital usage by consumers. However, she said she was surprised that the increase surpassed a 20% growth rate.  

Search increased 27% to $14.8 billion, compared with $11.7 billion in 2010. It also continues to garner the greatest share of online advertising revenues (46.5% in 2011).

Digital video, part of display-related advertising, increased 29% year-over-year to $1.8 billion in revenue, compared with $1.4 billion in 2011. Email revenues totaled $213 million, an increase of 9% compared with 2010, and lead generation revenues were $1.5 billion, an increase of 15% over 2010.

Not all categories increased revenue, however. Classified and directories remained essentially flat: $2.58 billion in revenues in 2011 compared with $2.59 billion a year earlier. Rich media, part of display-related advertising, also decreased to $1.3 billion in 2011, compared with $1.5 billion the prior year.

Silverman said the decline in classifieds and directories were partly due to the financial downturn, which especially impacts the housing and auto industries.

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