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Online Ad Revenues Hit Record High in 2010‎

Revenue jumped 15% to $26 billion last year, putting the Internet ahead of newspapers for the first time.

Advertisers spent a record $26 billion in the U.S. marketing their wares online last year, putting the Internet ahead of newspapers for the first time.

The 15 percent year-over-year surge in online advertising put the Internet second to television as the leading medium for generating ad revenue.   Television, which includes local, cable and broadcast spending, brought in $68.7 billion. Newspapers took in $22.8 billion.   The data was released Wednesday in a 26-page report from the Interactive Advertising Bureau and PricewaterhouseCoopers.   The report also compares the Internet’s 16-year-growth trajectory as an advertising medium to the early days of broadcast and cable TV. Even adjusting for inflation, the Internet has been more impressive.    After the first 16 years of broadcast TV (beginning in 1949), the medium was raking in $16.1 billion in the U.S. Cable TV after its first 16 years (beginning in 1980) was generating $7.3 billion in ad revenue.   Internet advertising, though, has taken a rocky path to get to this point, reaching $8 billion in 2000 but taking four years to surpass that amount as the bursting Internet bubble had advertisers fleeing.    Online advertising took another hit in 2009 because of the recession.   But the IAB report touted five straight quarters of growth. The 2010 rebound, said PwC’s David Silverman, “points to a continued focus on digital media ad spend, with dollars catching up to the eyeballs.”   Search, the area dominated by Google, accounted for 46 percent of the online ad revenue generated last year, while display stood at 38%. Revenue from digital video commercials surged 40 percent to $1.4 billion, about 5 percent of the $26 billion spent last year.   For the first time, the IAB and PwC measured mobile advertising, which came in at $550 million-$650 million last year.   The biggest advertisers online in 2010 were retailers, accounting for 21 percent of the money spent, followed by telecom (13 percent), financial services (12 percent), auto (11 percent) and computing products (8 percent). Further down the list of big advertisers were media (4 percent) and entertainment (4 percent). Those two industries spent $1.1 billion to advertise over the Internet last year. If combined into a single category, it would be tied with computing products for fifth on the list of largest online advertising industries.