Online ad revenues continue to soar

Online advertising sales hit an estimated $1.75bn (£1bn) in the third quarter, the fourth consecutive period of gains for the industry, according to new research.

Third-quarter sales represent a 20 per cent leap from revenue of $1.45bn in the same period a year ago, and a five per cent lift from sales of $1.66bn in the previous three months, according to the trade group Interactive Advertising Bureau (IAB), which sponsored the research, and auditor PricewaterhouseCoopers (PwC), which conducted it.

The quarterly total was also the highest in two years, since the third quarter of 2003 when the dot-com bubble started to deflate. Online advertising peaked in 2000 with $8bn in revenue before falling to $7.1bn in 2001, and $6bn in 2002, according to IAB's numbers.

Sales for the first nine months of 2003 were an estimated $5.04bn, up about 13 per cent from the comparable period a year ago.

IAB chief executive Greg Stuart said the growth speaks for itself.

"Clearly, the internet is proving itself a fertile marketplace, attracting advertisers and marketers across the board," Stuart said in a statement.

Much of the upturn has been attributed to search-engine-related marketing strategies: ads linked to keyword searches, or targeted ads generated when people enter queries. Google and Yahoo!-owned Overture Services have been the main drivers of this growth, selling advertisers placement in search results relevant to their products and services. Marketers are clinging to this form of advertising because it lets them track the success of ads.

Sales from keyword searches increased to 31 per cent of total ad revenue in the second quarter of 2003, according to the IAB, which hasn't broken out such figures for the third quarter yet.

Stefanie Olsen writes for News.com