US Online Ad Revenue Hits New Record

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Advertising skeptics might be surprised to read this: Online ad revenue topped a record $26 billion in 2010.

This figure represents a 15% increase from 2009, according to a PricewaterhouseCoopers and Interactive Advertising Bureau report released Wednesday. The previous record was in 2008, when revenue reached $23.4 billion.

Revenue for the fourth quarter also increased 16% to a record $7.4 billion, making it the fifth consecutive quarter of growth.

Web searching accounted for the most popular ad format, representing 46% – $12 billion – of the total revenue (good news for Google). Though “search” lost a bit of its overall share to display-related advertisements, it’s been the dominant player since 2006.

Display-related ads – including banners, rich media, digital video and sponsorship – totaled nearly $10 billion, or 38% of the year’s revenues. That’s a 24% increase from 2009. Classifieds revenue accounted for more than 10% of the digital pie, while lead generation and email comprised the 6% revenue remainder.

The report also estimated revenue for mobile advertising was between $550 million and $650 million. That includes search and display ads delivered through tablets and smart phones.

Retail advertisers spent the most on web advertisements, accounting for 21% of buyers.

Per AP, PwC partner David Silverman says more time spent online, especially with digital videos and social media, has helped online advertising growth.

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