Internet Ad Revenue Improves 26%

NEW YORK U.S. Internet advertising revenue for the first six months of 2005 reached $5.8 billion, a 26 percent increase over the first half of 2004, according to figures from the Interactive Advertising Bureau and PricewaterhouseCoopers.

Revenue totaled almost $3 billion for the second quarter of 2005, also a 26 percent increase over the same period in 2004 and a 6.6 percent increase over first-quarter 2005.

“The consistent growth in overall revenue shows that marketers may be shifting more of their total advertising budgets to online,” said David Silverman, a partner at PwC.

“This is a natural development as research shows that more consumers are spending a larger percentage of their media time online, while the flow of advertising dollars follows.”

The fastest growth was recorded for ad campaigns in search and rich media. Search advertising increased 27 percent while rich media increased 26 percent year to year.

But the figures may be cold comfort for small Internet ventures. Some 74 percent of the revenue is controlled by the top 10 Web sites, 89 percent by the top 25 and 97 percent by the top 50. These figures have changed little year to year.

William Makower, chief executive at online agency Panlogic, said, “The popularity of online advertising is tied to the increase in the number of people installing broadband Internet connections.

“This means that people are not having to wait for a banner to load, but can be interacting with the brand immediately,” he said. “The interaction is something that billboards and television cannot offer.”