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Spending on Web Ads Soars 42.7%

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From Reuters

U.S. Internet ad revenue jumped to a record $2.37 billion in the second quarter, surpassing the highest levels reached during the dot-com era, according to a study released Monday.

Spending for online advertising surged 42.7% from the year-ago period as advertisers devoted a larger share of their media budgets to online media companies rather than traditional media outlets, according to a study compiled by the Interactive Advertising Bureau and PricewaterhouseCoopers.

“Internet advertising is without a question taking share from the other media at this time,” said Greg Stuart, chief executive of IAB.

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The study cited several major advertisers that increased their online budgets for the year, including Ford’s Lincoln Mercury division, which is devoting 25% to online advertising.

Search engine-related ads, or paid search listings, remained the most popular form of advertising. They accounted for 40% of second-quarter ad revenue, up from an estimated 29% in the corresponding quarter last year.

However, industry analysts say growth in paid search listings is expected to cool over the next five years to about an 11% rate by 2009, compared with 65% in 2003.

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