More cash pours into online ads

Advertising on the internet continues to be an increasingly lucrative sector of the market, according to results announced on Monday by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers.

The revenue figures, which were released at the Mixx 2.6 Conference and Expo in New York, show internet advertising revenues have increased 37 per cent from the first six months of 2005 to those of 2006, reaching a total of $7.9bn. Additionally, quarterly revenues topped $4bn for the first time in the second quarter of 2006.

The IAB has compiled annual and semi-annual internet ad revenue reports in conjunction with PricewaterhouseCoopers since 1996, using data reported by companies that sell new-media advertising space.

According to the report, search advertising such as Google's AdSense continues to hold the biggest share of the online ad market with 40 per cent in both 2005 and 2006. Display advertisements, such as banner ads and Flash animations, come in at 31 per cent - down slightly from 34 per cent last year.

One reason for the continuing rise in internet advertising is the emergence of new platforms beyond the traditional website. These include mobile content and IPTV. In-game advertising has also been a source of new revenues as online games seep further into the mainstream.

At the same time, some older forms of advertising have suffered setbacks in the wake of new technologies. Television advertising, for example, has had to find creative solutions to the problem of ad-skipping digital video recorders such as TiVo amid dire predictions for the future of the typical 30-second TV spot.

Caroline McCarthy writes for CNET News.com