Online ad market surges past $1 billion in Canada

Integrated campaigns drive gains

Surging Canadian online advertising last year surpassed CAN$1 billion ($884 million) and is projected to reach CAN$1.14 billion ($1.06 billion) in 2007, the Interactive Advertising Bureau of Canada reported Monday.

The Canadian survey found that online ad revenue hit a record CAN$1.01 billion in 2006, up 80% from the 2005 total of CAN$562 million.

The report attributes the dramatic rise in online advertising to a greater degree of integrated broadcast and online campaigns, more blue-chip advertisers entering the online arena and an increase in the use of video in online advertising.

"It took us 13 years from when the first banner was served on the Internet, until now, to reach the billion-dollar mark in Canada; but it may take us only another two to three years to reach the second billion," IABC president Paula Gignac said.

The IABC, which represents online advertisers, agencies and Web sites here, said that display advertising accounted for 36% of last year's revenue, closely followed by search advertising with a 35% share, classifieds/directories holding 27% of business and e-mail another 2%.

The survey also found that automotive dominated Canadian online advertising, with 16% of total business, followed by consumer packaged goods at 14% and entertainment product at 9%.

Radio and TV advertising remains a strong business in Canada, with domestic broadcasters continuing to post record profits. But the IABC study said online advertising is enjoying phenomenal growth as domestic advertisers and their agencies follow the movement of consumers onto the Internet and other digital platforms.
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