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Summary:

The wider economy appears to be slowly improving, as wars and disasters continue to impede any chance at stronger growth, but you wouldn’t k…

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The wider economy appears to be slowly improving, as wars and disasters continue to impede any chance at stronger growth, but you wouldn’t know that from looking at the recent online ad numbers. Total online ad revenues for 2010 hit $26 billion — another record — up 15 percent from 2009. Meanwhile, Q4 ad revenue also hit new highs, coming in at $7.45 billion for a 16 percent gain from the same period the year before and 19 percent from Q3 2010. In addition, it’s worth noting that Q4 represented the fifth consecutive quarter of online ad growth.

Looking at the forecasts that have surrounded the IAB’s most recent numbers, eMarketer estimated U.S. online ad spending to have been $25.8 billion in 2010, surpassing newspaper advertising for the first time, making the web second only to TV in the amount of ad dollars.This year, eMarketer projects a 10.5 percent increase in U.S. online ad spending, followed by double-digit growth every year through 2014. Earlier this week, Publicis Groupe’s ZenithOptimedia said that globally, online will outpace the total amount of ad dollars spent on newspapers by 2013.

Putting those numbers in further context, U.S. online ad spending will account for 16.7 percent of total media ad spending this year, eMarketer said. Also, eMarketer believes U.S. mobile ad spending will break the $1 billion mark this year, up 48 percent from 2010.

Some of the highlights from the IAB report included:

– The most popular ad format in 2010 was search. It represented 46 percent of revenue and saw 12 percent growth from last year.
– Sponsorships had the biggest gains with an 88 percent increase over last year and 142 percent increase in Q4 alone.
– Display-related advertising — which includes video, sponsorships, rich media in general and of course, banners — continued to grow this year, totaling nearly $10 billion with an increase of 24 percent over 2009.
– The annual report marks the debut of estimated US mobile ad revenue for 2010: between $550 and $650 million.

The strong growth appears to be concentrated in the usual formats. For example, lead gen was up a decent 6 percent in 2010, a slightly lower growth rate than 2009′s 5 percent rise. The difference appears to be centered around the fact that marketers tend to ease off lead gen ad spending when the economy improves as they tend to emphasize branding efforts. In bad times, branding tends to suffer, as advertisers tend to concentrate on anything that will generate a direct sale. Even so, it looks like lead gen is persistently declining.

E-mail is experiencing an even worse decline. The 1 percent growth the segment recorded in both 2009 and 2010 suggests that marketers have largely given up on the format.

Turning to how pricing fared, impression-based dollars were up an impressive 33 percent to $8.5 billion last year. However, in 2009, that growth rate was 37 percent. The trend lines were markedly different on the performance based revenue, which 62 percent in 2010 versus 59 percent in ’09.

More to come

  1. Such great news for the online advertising space, as well as newspapers that have taking the risk and gone digital. Users are clicking, the advertising is working, and we hope to see trend lead to a bounce back in revenue for the newspaper industry. ZEDO is here to support such newspapers going digital with technology and service to make the transition easier, more efficient, and with a bigger payoff potential. Just visit http://www.zedo.com/technology/switchToZedo.htm to get started.

    PS – ZEDO just announced ZINC Ad Exchange, a ad exchange of guaranteed placements on newspaper sites. Learn more at http://blog.zedo.com/

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