IAB: Metrics Dispute Resolved; As Expected, 2006 Online Ad Revs Rose 35 Percent To $16.9 Billion

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The Interactive Advertising Bureau says its dispute over audience measurement ratings with comScore and Nielsen//NetRatings has been resolved. The parties met last week and the IAB said it has commitments from both to submit to timetables for the auditing of their technologies and processes by a third party. Specifically, Nielsen//NetRatings has formally announced its entrance into a full audit and accreditation process with the Media Rating Council, and comScore is in the final stages of its pre-audit with the MRC and will finalize its timeline for a full audit and accreditation within the next 90 days. Release

Last Year For Large Revenue Increases?: The Interactive Advertising Bureau’s March estimates for internet ad revenues in the U.S. were right on target: marketers spent $16.9 billion in 2006, beating 2005’s numbers by 35 percent, while Q406 online ad revenues totaled $4.8 billion, representing record revenues for a single quarter, according to a report by Interactive Advertising Bureau and PriceWaterhouse Coopers. The updated report broke out the category shares and found that search (40 percent share); display (32 percent share), classifieds (18 percent share) and lead generation (8 percent share) all continued to grow with an increase in both performance-based and CPM or impression-based pricing. Consumer advertisers continue to represent the largest category of internet advertising spending.

One issue the new report doesn’t break out: reports that online advertising may be slowing, as indicated by recent forecasts and reports forecasting from the NYTCO among others. Release

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Ashkan Karbasfrooshan

David, I don't think it's so much that "online advertising is slowing" as "non US markets will make up for the US getting ahead of other nations in terms of interactive advertising."

Example: in Canada (that big stretch of land above the USA), radio ads generated $1.3B, whereas Web ads garnered $1.01B. In a few years, which one will be larger, do ya think? Furthermore, if the Web is all about efficiency, more importantly, that means that the US’ Web industry at $16.9B is 16.7 times larger than Canada’s, yet the US population is only 10 times larger than Canada… and Canada skipped out on that whole dial-up thing and leapfrogged itself onto broadband. Between colder days, less sun etc., Canadians spend more time – hour for hour – than the US, so technically, it could be argued that the US should not be getting 16.7 times the web revenues that Canada gets, but somewhere like 8-10 times.

This is one very simple, but enormous reason why it is very normal for US online ad growth rates to slow down because as leader of the advertising world, the US has gotten a disproportionate share of ad dollars between 1994-2006 and a major chunk will flow to other nations, the Web is all about optimizing and hitherto, it's been anything but.

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