Internet advertising revenues are skyrocketing to new record levels. Paid search generates higher conversion rates than nonpaid search advertising. And almost 40% of consumers who encounter Web problems will abandon transactions, according to various study findings released Monday.
Internet advertising revenues for the first half of 2006 reached $7.9 billion to set a new record. That’s more than a 36% increase compared to the first half of 2005, according to study released by the Interactive Advertising Bureau and PricewaterhouseCoopers.
The bulk of online ad spending was for search, banner and classifieds. Spending was significantly lower for online advertising formats such as lead generation, sponsorships and e-mail, according to this study.
Related study findings released by the online marketing services firm WebSideStory Inc. found that paid search generated inquiries typically have better conversion rates, compared to organic search inquiries.
Pay-per-click keyword searches generate a 3.4% median conversion rate through search engines such as Google, Yahoo and MSN. The median conversion rate for nonpaid organic search runs 3.13%, according to WebSideStory’s study.
A study conducted by Harris Interactive found that among consumers who experience problems placing orders on given Web that nearly 40% will abandon that transaction. About 7% will give up entirely and 32% will turn to a competitor instead.
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