IAB Reports Record Half Year for U.S. Online Advertising

The first six months of 2010 represented the largest on record in terms of online ad spend, according to the IAB’s bi-annual Internet Advertising Revenue Report. The research, conducted in partnership with PricewaterhouseCoopers, estimates advertisers spent a total of $12.1 billion during that period, representing 11.3 percent growth compared with the first half of 2009.

Based on the report’s findings, David Silverman, a partner at PwC, said online ad spend is on course to reach at least $24 billion in 2010, which would represent the industry’s healthiest year since the IAB began conducting its annual spending research in 1996.

According to the report, growth in online spending was driven by a return to health for the display ad market, which grew 16 percent during the first half of 2010 on a year-over-year basis. Within that category, video advertising and sponsorships helped drive growth, increasing by 31 percent and 32 percent, respectively.

Paid search engine advertising also enjoyed a positive start to the year, growing 11.6 percent compared to the first half of 2009 and retaining a 47 percent share of overall online ad spend.

In terms of verticals, the travel and packaged goods categories helped contribute to the growth in spend, increasing their share of spend by one percentage points and two percentage points, respectively. Meanwhile, however, telecom advertisers reduced their share of spend from 16 percent to 14 percent in the first half of the year.

Overall, the estimates echo those made by the IAB’s U.K. branch last week, which suggested online ad spend grew by 10 percent in that market during the first half of the year, also aided by growth in display and video advertising specifically.