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Online Ad Revenues, Retail Up

Here’s one story that makes at least one major search engine happy: the IAB announced yesterday that online advertising revenues continue to climb, setting a new record in Q3: $5.2 billion. This number is up 25% over the same period last year.

Online ad revenues have risen all year: in Q1, they were at $4.9B and $5.1 in Q2. Each of these record-setting periods has contributed to increasing the total year-to-date by 26% over this time last year (YTD). This also means we’re on course for the first $20+ billion dollar year.

eMarketer reports that this development is chiseling away at offline media’s budget share: they project that 7.4% of advertising dollars this year will go to online media. They report that television, newspapers and radio have taken the hit the hardest: all those media have lost their share of advertising dollar spent (comparing Jan-Jun 2007 to Jan-Jun 2006).

They also report that:

Among the largest companies [$750M+ marketing budgets], 42.4% of marketing executives told BusinessWeek that TV would take the biggest hit in ad budgets in the next few years.

Read/Write Web points out that Google’s Q3 revenue was $4.3 billion: 83% of the total online ad revenue. While I’m sure at least some of that revenue came from other sources, it’s still important to remember where a lot of that money goes.

Online ad revenues aren’t the only online sector doing well: ecommerce/online retail is doing well, too. comScore reports today that in the US in October, consumers spent almost $10 billion in online retail. That’s an increase of 19% over October 2006. While still experiencing double-digit growth, apparently 19% growth is a disappointment, compared to the (nearly overwhelming) 21% average growth this year.

The strongest industries in online retail were video games, consoles & accessories (264%), furniture, appliances & “equipment” (105%), computer software (excluding games, 76%), event tickets (43%) and jewelry & watches (26%).