Internet Ads to Surpass $12 Bil. in 2005

NEW YORK Web ad spending passed the $3 billion mark in the third quarter, putting it on track to top $12 billion for the year, according to the Interactive Advertising Bureau.

The IAB and PricewaterhouseCoopers estimated third-quarter Internet ad spending at $3.1 billion, a 34 percent increase from Q3 2004.

Based on the typical fourth-quarter surge in marketing activity, the IAB expects 2005 spending will rise above $12 billion, which would represent at least a 25 percent increase from last year.

The IAB reports actual Web ad revenue for the first half of the year and the full year, providing top-line estimates for the first and third quarters.

IAB CEO Greg Stuart, in a statement, attributed the strong spending growth to increased brand advertising and continued strength in direct-response ads, a large portion of which are attached to search results.

The IAB’s third-quarter estimates underscore the enormous role Google is playing in the market’s expansion. It reported $1.05 billion in ad sales in the third quarter, which would give it a 34 percent share of the entire Net advertising industry.