Internet advertising revenue increased by 22% in 2011 in the US and reached $31 billion, according to a new report by the Interactive Advertising Bureau (IAB). The fourth quarter was the best quarter at $9 billion. PricewaterhouseCoopers prepared the report for the IAB.
While search is the main category of advertising with 44.8% of the revenue, mobile advertising has increased by 167% over 2010 (the first year that the report tracked mobile numbers) and is now 5% of US internet advertising revenue. Digital video, which is a component of display-related advertising category, saw a significant annual growth of 29% at $1.8 billion in revenue in 2011. Display-related advertising revenues in 2011 totaled $11.1 billion, which represents 35% percent of 2011 internet advertising revenue.
Some analysts mentioned the discrepancy between the amount of time people spent on the internet and the lower proportion of advertising spending for the internet versus other media such as TV, radio, and newspapers. Internet advertising spending is catching up in the proportion of overall advertising spending.
“This historic moment, with an especially impressive achievement in mobile, is indicative of an increased awareness from advertisers that they need to reach consumers where they are spending their time—in digital media. With the proliferation of smartphones and tablets, it is likely that the tremendous growth in mobile will continue as these screens become even more crucial to the marketing mix,” said Randall Rothenberg, President and CEO, IAB.
David Silverman, Partner, PwC, says that, "by combining some of the best features of the internet, along with portability and location-based technology, mobile advertising is enabling marketers to deliver timely, targeted, relevant, and local advertisements in a manner that was not previously possible. It is for these reasons that we expect strong growth to continue with mobile advertising.”
According to Sherrill Mane, the IAB’s senior vice president of research, analytics, and measurement, CPMs are not falling quite as quickly as they used to be. It could stabilize—or even rise—in the future.