Record highs for new-media ads

Revenues for the first half of 2006 are up 37 percent from equivalent period in 2005, and continuing to climb.

Caroline McCarthy
Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
2 min read
Advertising on the Internet continues to be an increasingly lucrative sector of the market, according to results announced Monday by the Interactive Advertising Bureau and PricewaterhouseCoopers.

The revenue figures, which were released at the MIXX 2.6 Conference and Expo in New York, show that Internet advertising revenues have increased 37 percent from the first six months of 2005 to those of 2006, reaching a total of $7.9 billion. Additionally, quarterly revenues topped $4 billion for the first time in the second quarter of 2006.

The Interactive Advertising Bureau (IAB) has compiled annual and semiannual Internet ad revenue reports in conjunction with PricewaterhouseCoopers since 1996, using data reported by companies that sell new-media advertising space. According to the report, search advertising such as Google's AdSense continues to hold the biggest share of the online ad market with 40 percent in both 2005 and 2006. Display advertisements, like banner ads and Flash animations, come in at 31 percent, down slightly from 34 percent last year.

One reason for the continuing rise in Internet advertising is the emergence of new platforms beyond the traditional Web site. These include mobile content and Internet protocol television (IPTV), a phenomenon that bolstered its presence in promotional campaigns for this fall's new TV show lineup. In-game advertising has also been a source of new revenues as online games seep further into the mainstream.

At the same time, some older forms of advertising have suffered setbacks in the wake of new technologies. Television advertising, for example, has had to find creative solutions to the problem of ad-skipping digital video recorders (DVRs) like TiVo amid dire predictions for the future of the typical 30-second TV spot.