2006 a record year for online advertising

The latest Internet Advertising Revenue Report shows online advertising breaking records in both Q4 of 2006 and the year as a whole. In the U.S., online ad revenue reached $16.9 billion for the year.

by Kristina Knight

That is an increase of 35% over 2005 revenue. Meanwhile, Q4 2006 showed revenue of $4.8 billion, again a 35% increase over Q4 2005.

The report was researched by the Interactive Advertising Bureau and PricewaterhouseCoopers LLC. Peter Petrusky, director, Advisory, PricewaterhouseCoopers said, "The internet continues to offer marketers the widest spectrum of advertising formats, from search-based text ads to dynamic rich-media and broadband video ads. Online publishers may continue to experience growth as marketing budget allocations to all interactive forms continue to increase.”

Display advertising showed the most growth (32% overall) to $5.3 million. Keyword search was next (40% growth overall) with revenues of $6.7 million. Classified advertising (18% growth), lead generation (8% growth) and email (2% growth) also showed strong numbers for the year and Q4.

The question is, can this kind of growth continue. Several reports have more large corporations, from the automobile industry to travel companies, pushing more of their advertising budgets toward the online arena.

As advertisers learn which online ad avenues lead to the best ROI, other ad types will disappear. For example, if an advertiser has the best ROI from search ads, they will not continue to put an equal amount of their budget into display ads.