“Results for 2006 confirm a very healthy environment for online advertising,” said David Silverman, a partner at PricewaterhouseCoopers. “All signs point to a steady increase in the level of spending by traditional advertisers that are using online advertising as an important part of their media mix.”
According to the report, online advertising revenues mushroomed from just over $12 billion in 2005 to slightly less than $17 billion in 2006.
The spike in online advertising signals a recognition by traditional marketers that Internet ads do an effective job of reaching consumers, according to Peter Petrusky of PricewaterhouseCoopers.
“The maturation of the Internet as an effective advertising medium is directly tied to its ability to deliver qualified audiences to marketers,” Petrusky said.
The IAB and PricewaterhouseCoopers first began monitoring online ad spending in 1996. The firms compile their data by surveying the top 15 ad sellers, including Google and Yahoo. A more detailed report with breakdowns will be released in April.
According to an article in Computer World by Juan Carlos Perez, the resurgence in online advertising signals the success of Web 2.0. In 2000, ad revenues reached a plateau at slightly more than $8 billion per year when many marketers began to lose faith in new media because of the end of the dot-com bubble.
In 2001 and 2002, online ads actually began to decline. But in 2003, the Internet as an engine for commerce began to show signs of recovering from the dot-com bubble collapse. The emergence of Google as a search engine and advertising powerhouse the following year helped add to the positive momentum, Perez said.