Online Ads Hit New Record in 2007

Written by Ryan Lawler

Friday, May 16. 2008 at 11:58 AM EDT Post a comment

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Online properties beat out radio and cable networks in total ad revenues, according to a report by Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers International .

Online ad spending hit a record of $21.2 billion in 2007, up 26 percent from the previous year's total of $16.9 billion. That compares with $20.9 billion for cable networks, $19.8 billion for radio, and $19.2 billion for broadcast networks.

Interactive ad sales have increased for 13 consecutive quarters -- and 20 of the last 21 quarters -- rising to $5.9 billion in the fourth quarter of last year, compared with $5.3 billion in the third quarter.

Consumer ads continued to be strong, accounting for 55 percent of all online ad sales, compared with 52 percent in 2006. Financial services accounted for 15 percent, with computing advertisers making up an additional 11 percent.

In the consumer segment, retail made up 47 percent of online spend, followed by automotive (21 percent), leisure (13 percent), entertainment (9 percent), and packaged goods (8 percent).

Search revenue made up 41 percent of revenues, up from 40 percent the year before. That was followed by display advertising (34 percent), classifieds (16 percent), and lead generation (7 percent).

While the IAB and PWC report shows impressive online ad spend for last year, more recent reports are not so rosy. A monthly monetization index published by online ad consultancy PubMatic shows that overall online ad monetization fell in April.