Web Revenue Up 35%

NEW YORK The Web advertising industry had its best year ever in 2006, climbing 35 percent to $16.9 billion in overall revenue, according to the Internet Advertising Bureau.

That increase was fueled at least in part by record fourth-quarter ad revenue of $4.8 billion. Both brand-oriented display ads and search placements saw similar strong growth.

The IAB said search revenue for the year was $6.8 billion, up 31 percent from a year earlier. Display revenue was $5.4 billion, also up 31 percent. Search advertising’s share of the overall market fell slightly from 41 percent to 40 percent.

The report showed the Web making progress adding brand-advertising dollars to complement the response-oriented ads that have typified the market. Packaged-goods advertisers showed the highest growth rates among industries, earmarking $1.4 billion to interactive, more than doubling spending in 2005. Automakers also increased their already strong expenditures, with revenue from car brands rising 48 percent to $3.7 billion.

The report also paints the picture of a maturing industry. Fourth-quarter revenue grew 14 percent from the third quarter, similar to the 15 percent growth rate of the past two years’ fourth quarters. The industry also remains concentrated among the top sellers, which accounted for 69 percent of revenue.

“We have every confidence this growth will continue as marketers allocate more of their total marketing dollars to interactive and the industry delivers effective and innovative platforms for connecting with consumers,” Randall Rothenberg, the IAB’s CEO, said in a statement.

According to the IAB, the Web now accounts for about 5.9 percent of overall ad spending, closing in on radio, which generates $20.8 million in ad revenue.

The IAB prepares the report with accounting firm PricewaterhouseCoopers.