Internet advertising revenues in the US reached a total of $3.1 billion in the third quarter of 2005, marking the highest quarter on record reported and showing quarterly online adspend to have surpassed $3 billion for the first time.
The figures from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) represent a 33.9% increase over Q3 2004’s total of $2.3 billion and a rise of 4.7 % over Q2 2005.
Commenting on the results, Greg Stuart, president and chief executive officer of the IAB said: “More and more marketers have embraced interactive as an essential medium to reach and engage their consumers in more immersive brand experiences.”
He continued: “Moreover, interactive advertising continues to prove its self as the most cost effective medium in driving sales and changing consumer attitudes providing a powerful competitive edge for these marketers.”
Pete Petrusky, director of Advisory Services at PricewaterhouseCoopers added: “The continued strength in Internet advertising reflects in part the medium’s unique ability to collapse the business cycle for advertising, marketing and branding, making it more attractive for traditional advertisers. The high percentage growth in revenues is more significant given the larger revenue base.”
Looking towards the rest of 2005, the report forecasts that the annual revenue rate for 2005 could exceed $12 billion, far surpassing last year’s figure of $9.6 billion.
The strong performance of online advertising is a clear indicator that advertisers and marketers are waking up to the power of the internet as a tool to target prospective audiences.
These findings are confirmed with recent research published by online magazine, Direct, claiming that marketers are shifting their adspend onto the internet, with 60% planning to raise their online advertising expenditure in 2006 (see Consumers Predict Mobile TV To Enjoy Popularity).
Direct’s 2005 Online Marketing Survey shows that marketers are allotting 41% of marketing budgets to online channels this year, taking money away from traditional direct marketing channels. The survey found that marketers allocated 75% for traditional channels last year, compared to just 59% this year.
According to previous figures from the IAB and PwC, internet advertising revenues for the first six months of 2005 reached a new record, totalling $5.8 billion, an increase of 26% compared to the same period last year (see Consumers Predict Mobile TV To Enjoy Popularity).
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