Online Ad Revenue Surges to New High

May 30, 2011 6:00 AM PST

NEW YORK — Internet advertising revenue jumped to a record high in the first quarter of 2011 to $7.3 billion.

According to the Interactive Advertising Bureau (IAB) the numbers reflect a 23 percent increase over the first quarter of 2010.

The IAB said the impressive gain marks the growing importance of digital marketing and advertising.

The IAB didn’t break out whether it was search or display that fueled the surge, but tech watchers consider display the main driver, especially with video and mobile gaining double digits each year.

An International Data Corporation (IDC) report said that for the ninth quarter in a row, display advertising continues to grow faster than search advertising, with display’s share growing while search’s share declined. Display’s share is currently at 33.3 percent compared with 29 percent two years ago, while search declined to 48.7 percent  (compared with 53.4 percent two years ago).

“The consistent and considerable year-over-year growth we’re seeing demonstrates that digital media is an increasingly popular destination for ad dollars, and for good reason,” said Randall Rothenberg, IAB president and CEO.

He added, “As Americans spend more time online for information and entertainment purposes, digital advertising and marketing has emerged as one of the most effective tools businesses have to attract and retain customers.”

David Silverman, a partner at PricewaterhouseCoopers commented, “The year-on-year 23 percent increase in first quarter revenues is not just impressive in its own right, but especially so when you take into account the fact that 2010 was a record-breaking year itself for Internet advertising revenue.”

“These numbers indicate that the interactive advertising field hasn’t simply bounced back since the recession; it’s growing with dynamic energy,” Silverman continued.

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