If there was any question as to whether or not online advertising is doing well, a new report from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PWC) gives the answer. In 2010, online ad revenues in the United States grew by an impressive 15% to $26 billion. Clearly, online advertising is a key component of brand marketing plans that shows no signs of slowing down.
The biggest winner in the online advertising realm during 2010 was sponsorships, which according to the IAB and PWC report, grew 88% over 2009 and included an incredible 142% increase in just the fourth quarter of 2010. However, sponsorships make up a very small part of overall online ad revenue. Search advertising holds the top spot at over $12 billion for 2010 (a 12% increase over 2009). Display advertising (including banner ads, display ads, and rich media) takes the number two spot and grew 24% over 2009 to $10 billion in 2010. Digital video advertising jumped by 40% in 2010.
The 2009 and 2010 ad revenue by format data from the report is provided below:
The IAB and PWC conduct this research semi-annually, and the 2010 data report marks the fifth year in a row that annual online advertising revenue has grown. The new report also includes mobile ad revenue in the United States for the first time. With 2010 mobile ad revenue estimated to be between $550 and $650 million, we can expect to see those numbers skyrocket in the 2011 report.
Another interesting finding in the IAB and PWC report relates to the increased focus on performance-based advertising, which made up 62% of online ad revenue in 2010 (up from 59% in 2009) versus impression-based advertising at just 33% (down from 37% in 2009) and hybrid at just 5% (up from 4% in 2009).
Online advertising is growing for a number of reasons. First, customers are spending more time online than ever before. Second, there is a lot of unsold display advertising inventory out there so pricing is attractive to advertisers. Third, there are a lot of opportunities available for advertisers to seize in the “less popular” ad formats such as digital video, sponsorships, and mobile. These advertising opportunities aren’t already taken, so there is still time to make your brand stand out from the crowd in mobile advertising or online video advertising.
What do you think about the current state and future of online advertising? Which online advertising formats do you plan on investing in to advertise your brand in 2011 and 2012? Leave a comment and share your opinion.
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