Internet ad profits up by a third
29 April 2005
US internet advertising profits rose by 33 per cent in 2004 to a record $9.6 billion.
The Interactive Advertising Bureau and PriceWaterhouseCoopers found that online advertising spend surpassed levels seen during the early web boom, soaring to more than $9.6 billion over the year. The IAB predicts that advertising profits will grow at a similar rate in 2005.
Advertisers have indicated in recent months that they are starting to move more of their marketing budgets online. Quarter four 2004 revenues totalled a record $2.69 billion, making it the highest quarter ever reported.
The report states that search, classifieds, display and rich media continue to grow at a healthy rate. Consumer advertisers continue to represent the largest category of advertisers accounting for 49 per cent of the 2004 annual revenues, while the largest sub-categories under the consumer umbrella include retail, automotive, leisure, entertainment and packaged goods.
As a percent of 2004 total revenues, Computing and Financial Services account for 18 per cent and 17 per cent of 2004 total revenues, with Telecommunications and Pharmaceutical & Healthcare at four and six per cent respectively.
"Interactive Advertising has clearly become a mainstream medium and one that can no longer be ignored as a critical piece of any marketing mix," said Greg Stuart, president and CEO of the IAB. "The PwC 2004 reported figures indicate that interactive is firing on all cylinders including display, search and classifieds and is squarely on track to surpass consumer magazine revenues."
"The increased adoption of broadband will continue to evolve the face of interactive advertising as more compelling media ads and video formats are created," added Tom Hyland, partner at PricewaterhouseCoopers. "More and more, brand marketers will look to interactive as an integral platform to deliver rich experiences for brand building and enhancement."
Search engines Yahoo! and Google both recently announced record advertising revenues for 2004.
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