Web Advertising Shows Significant Increase

NEW YORK — Once considered an over-utilized and inefficient marketing tool, online advertising is once again on the rise, growing to nearly $3 billion in the U.S. market during the second quarter.

According to a study released today by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers, the 26 percent increase is primarily due to the growth of paid search listings like the service behind Google’s phenomenally successful search engine. Audio and video technologies that give online ads a “rich media” edge have also bolstered the market, the study said.

David Silverman, partner at PricewaterhouseCoopers, said the increase suggests many marketing campaigns are taking a new direction, noting that ad revenue for the entire first half of the year reached $5.8 billion, also a 26 percent increase from the first half of last year.

"The consistent growth in overall revenues shows marketers may be shifting more of their total advertising budgets to online," Silverman said

According to the study, 40 percent of online ad spending went to paid search listings like the ones offered by Google and Yahoo. Microsoft has also entered the paid search market, coincidentally debuting paid search listings on its MSN search engine today.

Standard web page banners accounted for 20 percent of online advertising, while classified ads accounted for 18 percent, the study said. Currently rich media ads only make up 8 percent of the market, but the study said growth in this sector would increase dramatically as the technology catches on.

The prospect of rich media ads has caused quite a buzz in the advertising community recently. Rich media technologies offer advertisers the ability to create ad units that can perform a variety of marketing tasks, such as capturing user-supplied data, printing out information directly from an ad, allowing the user to download files from the ad, and changing the ad’s size and format upon user interaction, without requiring the user to leave the page they are on.

Rich media ads also provide valuable user data to companies, including statistics on how the ad was displayed and how long it was viewed.

The 200 online companies represented by the IAB sell roughly 90 percent of Internet advertising in the United States.

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