Internet advertising revenues in the U.S. totaled $12.5 billion in 2005, exceeding the previous year’s figure by 30%, according to a report issued by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers.
It was the third consecutive year of record increases in Web ad revenue.
Paid-search commanded the lion’s share of that budget. Keyword search ads accounted for $5.1 billion of U.S. online ad spending last year, or 41% of the total, a slight increase from the 40% share in 2004.
Display advertising accounted for the second largest budget item; the report found $2.5 billion spent on banners, graphical ads and the like last year, or 20% of the total spend. Online classified advertising was the third largest category, with $2.1 billion spent and 17% of the total spent on the Internet.
One billion was spent on rich media ads in 2005 (8% of the total ad spend); $753 million on referrals and lead generation (6%); and $251 million on e-mail campaigns (2%), up from $96 million last year, according to the report.
Consumer advertisers made up the largest category of online ad spenders last year (51%), and retailers lead the consumer category, accounting for 47% of ad spending on the Web in 2005. Other prominent advertisers included automotive (20%), leisure (14%) and entertainment (10%).
Among other ad options, IAB found that Internet advertising got almost 5% of total U.S. ad spending in 2005, up from less than 4% in 2004.
“Continued strong growth in online advertising documents that an increasing number of advertisers and marketers see the Internet is an essential brand-building component in their media planning,” said Peter Petrusky, advisory director of PricewaterhouseCoopers. “The Internet delivers the right audience at the right time—a winning combination for all types of marketers. We expect to see continues growth in Internet advertising spend.”
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