IAB 2006 Full Year Ad Spending Analysis

People know the numbers ($16.9 billion FY 2006) and many people have seen the report already, but here it is (.pdf). The ad format/category distribution was basically unchanged from 2005 (search, display, classifieds and lead-gen):

• Search remains the largest revenue format, accounting for 40 percent on 2006 full year revenues, slightly down from the 41 percent reported in 2005. Search advertising revenues total $6.8 billion for the full year 2006, up 31 percent from the $5.1 billion reported in 2005.
• Display-related advertising totaled $5.4 billion, or 32 percent of full year 2006 revenues compared to $4.3 billion (34 percent of total reported in 2005. Display-related advertising includes Display ads (22% of 2006 full year revenues), Rich Media (7%) and Sponsorship (3%).
• Classifieds revenues accounted for 18 percent of 2006 full year revenues or $3.1 billion, up slightly from the 17 percent ($2.1 billion) reported for 2005.
• Lead Generation revenues accounted for 8 percent of the 2006 full year revenues or $1.3 billion, up from the 6 percent or $753 million reported in 2005.

Here’s the distribution of spending by ad format, comparing 2005 to 2006 (click to enlarge):

Here’s the spending distribution by consumer category (click to enlarge):

The Internet, which of course is not a monolith, is now a bigger ad spending medium in the US than:

• Yellow pages
• Consumer magazines
• Business magazines
• Outdoor

Among the online ad formats, display ads are poised for the strongest growth in the next 12-24 months, which partly explains all the M&A activity in the ad network space and partly why Google is doing this. Here’s a fairly compelling slide presentation that supports the assertion, from BusinessWeek (look at slide 2 for example).

__

Related: Kate Kaye has a nice overview at ClickZ.

Advertisement