2008 proved to be solid from an online advertising perspective, showing impressive growth according to the 2008 Internet Advertising Revenue Report, released by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP. $23.4 billion was spent on online advertising last year, up from $21.2 billion in 2007 - a 10.6% growth rate.
I am still digesting the report, but there were a few interesting tidbits. As you would expect, search really grew robustly last year by almost 20%. Display also grew by 8%, not bad considering that overall advertising supposedly shrank last year. Digital video advertising grew by over 125% to $734 million - still a small amount, but moving quickly into becoming a real category.
A couple of other interesting items:
Approximately 57 percent of 2008 full year revenues were priced on a performance basis, up from 51 percent reported in 2007.
Approximately 39 percent of 2008 full year revenues were priced on a CPM or impression basis, down from 45 percent in 2007.
and
Financial Services advertisers represented the second-largest category of spending at 13 percent of 2008 full year revenues or $3.0 billion, down from the 15 percent ($3.2 billion) reported in 2007.
Automotive advertisers accounted for the third-largest category of spending at 12 percent of 2008 full year revenues or $2.8 billion, up slightly from the 12 percent ($2.5 billion) reported in 2007.
How did auto manage to increase ad spending while financial services shrank? I guess we know who is using their bailout dollars to try to sell their product vs. having it sit on their balance sheet…
Of course, none of this mitigates the fact that venture capitalists are not very interested in investing in pure “advertising” based business models (i.e. sites trying to generate their revenues off of their users’ eyeballs…)
