Report: 2007 Interactive Ad Revenue to Exceed $21 Billion

Riding quarter-upon-quarter waves of growth, Internet advertising revenues for 2007 likely surpassed $21 billion, smashing the 2006 figure by miles, according to a new report.

The estimate comes from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) in the latest of their Internet Advertising Revenue reports. Based on research conducted by PwC and sponsored by the IAB, the report estimates Internet ad revenue increased by 25 percent last year compared to 2006, a decline in growth rate compared to prior years which is in keeping with other reports.

While the 2006 Internet ad revenue figure of $16.9 billion was a record, 2007’s activity swamped that high-water mark. The IAB and PwC estimate companies spent $21.1 billion on Internet advertising last year.

In the final quarter of the year, those companies forked over about $5.9 billion, the biggest quarterly number ever reported by the IAB and PwC, and a 13 percent increase over third quarter of 2007. The $5.9 billion figure represents an increase of 24 percent over the fourth quarter of 2006, according to the report.

The IAB and PwC noted that Internet ad revenues for the each of the four financial quarters of 2007 were record-busters. In a statement, PwC partner David Silverman said the $21.1 billion year for interactive advertising “is the culmination of consecutive record quarters throughout 2007.”

The IAB’s Internet Advertising Revenue Report is published twice yearly, for full- and half-year data, while quarterly estimates are issued for the first, third and fourth quarters. Q4 and full-year estimates are attained by surveying and aggregating data from the top 15 online ad sellers. That data is extrapolated to calculate the total estimated figure.

In a statement IAB president and CEO Randall Rothenberg attributed the revenue growth to the fact that “there is no media as measurable as interactive,” and he added that Internet companies are attractive to consumers (and advertisers) because “they provide products and services at the precise moment a consumer desires them.”