Online ad revenue for 2007 rose 26% worldwide last year to reach $21.2 billion, marking four consecutive years of record-breaking growth, according to a report from the Interactive Advertising Bureau.
The study, developed with consulting firm Pricewaterhouse Coopers, found that spending on Internet advertising of all kinds last year exceeded global budgets for outdoor ads, magazines, radio and cable TV spots, on which marketers spent a collective $20.9 billion in 2007.
Online ad spending for the fourth quarter of 2007 reached $5.9 billion, up 24% from the same quarter in 2006 and the largest quarterly Internet ad spend since the IAB began tracking revenue. According to IAB findings, Q4 2007 was the thirteenth consecutive year of record online spending.
“This achievement is a testament to the continued vitality of interactive,” IAB President and CEO Randall Rothenberg said in a statement. “Explosive innovation in the industry is providing marketers with new and unique ways to reach consumers. It’s a very exciting time.”
As in 2006, paid search got the lion’s share of the online ad dollars last year, accounting for $8.8 billion, about 41% of the total spend. Display ads, including banners and other graphical ads, rich media, video and site sponsorships, took in $7.1 billion in 2007 and made up 34% of online spending. Marketers spent about $3.3 billion on Web classified ads last year (16% of the total figure), $1.6 billion on lead generation (7%) and $424 million on e-mail marketing (2%).
Similarly, the verticals spending the most on Internet marketing last year showed no big surprises. Consumer advertisers accounted for most of the spending (55%), followed by financial services (15%), computing (11%), telecom (8%) and media (6%). In the consumer category, retailers were the biggest Web advertisers (47% of total category spend), then automotive (21%) and leisure (13%).
Internet ad spending is also heavily concentrated on a relative handful of Web sites. The top 10 sites scooped up 69% of ad revenue in 2007; the top 25 sites garnered 80%, and the top 50 accounted for 89% of online ad spending.
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