Internet Ad Sales Up 3 Years Running

The beat goes on. The media may change, but the message must always get through; advertising must prevail. Internet advertising is doing exactly that, and doing it better last year than ever before. Online advertising is expected, this year, to surpass spending on advertising in the Yellow Pages, according to the Interactive Advertising Bureau. Last year’s revenues were $12.5 billion, up 30 from the previous record of $9.63 billion in 2004. There were few surprises in the big numbers. Search remained the largest generator of revenues, accounting for $5.1 billion, or 41 percent, of the 2005 figures. Banner and other display ads made up the second-largest category, accounting for 21 percent of 2005 revenues. Online classifieds followed at 17 percent.

Welcome to the Party!

If you think online advertising is costly, lots of people are paying. Search accounts for virtually all of Google’s revenues. Google was a pioneer for the format in which text ads are displayed next to regular search results, the text ads customized to match the subject on which a user is searching. Time Warner Inc.’s AOL unit has decided to make most of its features free, much like commercial television, through its ad-supported sites. Even so, Internet advertising represents only 5 percent of all U.S. advertising revenues. Internet advertising is expected to grow another 25% next year; the prices are rising and no wonder! 50 new stores come online every day. Advertising, smart advertising, is more important than ever.