Online Ad Revenues Hit $12.5 Bln in 2005

By Geoff Duncan April 20, 2006

Figures reported by PricewaterhouseCooopers and the Internet Advertising Bureau show that 2005 was a banner year for the online ad market, with revenues jumping to some $12.5 billion for the year (PDF). The number marks a 30 percent increase over online ad spending in 2004, which totaled just over $9.6 billion.

“Interactive Advertising continues to experience tremendous growth as marketers experience its overall effectiveness in building brands and delivering online and offline sales,” said Greg Stuart, IAB’s CEO. “We are confident that this growth trend will continue as more marketers find Interactive to be an imperative and additional platforms including broadband video, gaming, iPTV and others continue to emerge as real opportunities.”

Not surprisingly, keyword search advertising accounted for some 41 percent of advertising revenue in 2005; the next largest category was display advertising at 34 percent, although that includes traditional banner advertisement as well as sponsorships and rich media ads. Classified advertising accounted for 17 percent of 2005’s online ad revenue, while advertisers put just 2 percent of their money into email advertising.

The advertising survey is conducted by PricewaterhouseCooper’s New Media Group, and claims to represent data from all companies which report “meaningful” advertising revenue, including online advertising revenues from Web sites, commercial online services, email providers, and others.

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