IAB Study: Online Ad Market Grows 26%

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(AP) Search-based keyword ads largely propelled the 26% growth — to a record $5.8 billion — in U.S. Internet advertising revenues for the first half of the year.

That compares to $4.6 billion for the same period last year, according to the Interactive Advertising Bureau.

The IAB did not release the full study, which PricewaterhouseCoopers conducted on its behalf. Although the report was not yet finished, the bureau said it wanted to release numbers during a marketing conference that opened Monday.

Internet-based advertising remains a small portion of the total U.S. advertising market, which was $71 billion during the first half of 2005, according to research firm TNS Media Intelligence.

Search ads made up 40% of the online ad revenues, the same share as the first half of 2004. But revenue totals for search jumped 27% to $2.3 billion, from $1.8 billion. Display ads made up 20% and classifieds 18%.

“The consistent growth in overall revenues shows marketers may be shifting more of their total advertising budgets to online,” David Silverman, a partner with PricewaterhouseCoopers, said in a statement. “This is a natural development as research shows more consumers are spending a larger percentage of their media time online, while the flow of advertising dollars follows.”

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