Digital Advertising Logs Record-Breaking Quarter

'Banner' first half shows 23% Growth

Interactive advertising revenues totaled a record $14.9 billion in the first half of 2011, a 23.2 percent increase over last year. The growth rate is comparable to pre-recession levels, said Sherrill Mane, Senior Vice President, Industry Services, IAB. The second quarter was especially strong; revenue increased 24.1 percent over last year to $7.7 billion.

The top 50 companies make up 89 percent of all digital advertising revenue, said David Silverman, a partner at PricewaterhouseCoopers, which partnered with IAB for the report. But “the tail is getting a little longer,” he said, as that percentage was previously in the mid-90s in recent years.

Digital ad spend growth has out-performed every other category measured. For some context: In the same period, cable TV grew 20.1 percent, network TV fell 3.1 percent, spot TV grew 9.7 percent, magazine advertising grew 3.6 percent, and local newspapers fell 7.7 percent.

Within the interactive category, display and search advertising both grew at 27 percent. Search represents $7.3 billion of all digital ad revenue and display represented $4.3 billion. The growth in display (defined to include banner ads, digital video, rich media and sponsorships)  was driven in part by sponsorships, which grew at 93 percent over last year. 

Mane said the growth was boosted by brand dollars, which are in the early stages of shifting spending to digital advertising. “The trend is quite clear that money is shifting more in the brand area,” she said. 

Retail, telecom, financial services, automotive, and technology/computing advertisers remained strong spenders; pharmaceuticals, healthcare and consumer packaged goods decreased their spend in the first half.