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Online ad spending has decisively turned around last year’s slump, thanks in large part to much higher spending on display advertising durin…

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Online ad spending has decisively turned around last year’s slump, thanks in large part to much higher spending on display advertising during the first half of the year, according to the latest numbers from the Interactive Advertising Bureau and PwC. While last year saw no mentions of “record-breaking” amounts, the IAB’s announcement was clear that online ads are back to reaching new heights, as U.S. figures hit $12.1 billion in h110, for an 11.3 percent increase. Meanwhile, Q2 was particularly strong, as web ad spending grew 13.9 percent to $6.18 billion.

All year long, online advertising has shown signs of a comeback despite the uncertainty about the health of the wider economy. In part, the pent up demand from last year have helped the media industry’s general turnaround. Meanwhile the percentages could seem misleading, since they’re coming off of a severely depressed 2009. Nevertheless, the numbers seem clear that online is back on track, even if the 30 percent growth rates from three and four years ago are a thing of the past.

The return of display was a big factor in the first half’s robust growth numbers. Part of it has to do with the fact that spending on brand campaigns has become a focus for marketers this year, as downturns tend to inspire more spending on direct response and lead generation — i.e., efforts that will have a more clear return on investment. Branding, despite all the promise of better targeting, leans more on art than science, even for online.

The continued rise of online video ad spending also played a role. As did the growing use of larger ad formats. Over the past few months, Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO) and AOL (NYSE: AOL) have all been experimenting with screen takeovers and larger formats designed to drive premium dollars their way.

As for the highlights from the IAB’s report:

Display, which includes banners, rich media, digital video and sponsorships, totaled more than $4.4 billion in the first six months of 2010, rising nearly 16 percent over the same period in ’09. Online video reached its highest half-year performance ever with 31 percent gains over first half ’09. Display’s share of online ads inched up a bit in the first half, comprising 36 percent of all interactive spending. That number was 34 percent last year.

Search continues to hold the largest percentage of overall interactive ad spend at 47 percent (the same as last year), representing more than $5.7 billion for the first six months of 2010. That’s an 11.6 percent increase from the same period last year. Release

  1. Online [ad spending] is back on track says IAB

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