Internet advertising revenues reach historic high of US$17bn for first half of 2012

12 Oct 2012

Internet advertising revenues for the first half of 2012 in the US reached US$17bn, a new historic high, and a 14pc increase on the previous year, according to the Internet Advertising Bureau.

This performance is compared to the landmark US$14.9bn reported for the first six months of 2011, according to the figures prepared for the Internet Advertising Bureau (IAB) by PricewaterhouseCoopers in the US.

“This report establishes that marketers increasingly embrace mobile and digital video, as well as the entire panoply of interactive platforms, to reach consumers in innovative and creative ways,” said Randall Rothenberg, president and CEO, IAB.

“These half-year figures come on the heels of a study from Harvard Business School researchers that points to the ad-supported internet ecosystem as a critical driver of the US economy. Clearly, the digital marketing industry is on a positive trajectory that will propel the entire American business landscape forward.”

The growth of mobile and digital video advertising

Mobile generated significant growth – almost doubling year-over-year – up 95pc to US$1.2bn in half-year 2012 from US$636m in the comparable 2011 period.

“The tremendous growth of mobile advertising revenue over the past year is an indication of the importance of location to advertisers and mobility to consumers,” said David Silverman, a partner at PwC US. “Bringing the power of the internet to mobile devices has opened up a world of possibilities to both consumers and marketers.”

Digital video, a component of display-related advertising, saw an increase of 18pc year-over-year, bringing in a little more than US$1bn in revenue in the first two quarters of 2012 compared to nearly US$900m in the first six months of 2011.

Search revenues in the first half of the year totalled US$8.1bn, up 19pc from nearly US$6.8bn during the same timeframe in 2011.

Display-related advertising revenues in the first half of the year totalled almost US$5.6bn, accounting for 33pc of 2012 half-year revenues, up 4pc from US$5.3bn in the first half of 2011.

Retail advertisers constitute the largest category of internet ad spending for the first half of this year, claiming 20pc of the total revenues at US$3.4bn, while Automotive brought in US$2.2bn for the first half of 2012, marking an uptick to 13pc versus 11pc of category spend reported for half-year 2011 at US$1.7bn.

“Solid double-digit growth in a stagnating economy is a significant accomplishment,” said Sherrill Mane, senior vice-president, Research, Analytics and Measurement, IAB. “There is evidence that CPMs are maintaining, and even increasing, further substantiating the vitality of the internet ad market.”

Digital marketing image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years