US Internet Advertising Surged 33% in 2004

02 May 2005

The Interactive Advertising Bureau hype machine is once again in overdrive, celebrating surging growth in 2004 with online expenditure levels reportedly up 33% to $9.6 billion (€7.43bn; £5.02bn). This betters even the frenetic internet gold rush before the bubble burst in 2000.

And according to the latest report, released late last week by the IAB and PricewaterhouseCooper, spend is set to grow at a similar rate this year. Rah-rahs IAB president Greg Stuart: "Interactive advertising has clearly become a mainstream medium and one that can no longer be ignored."

Also talking up the medium is research firm eMarketer, which predicts expenditure growth rising this year by 33.7% to $12.7bn. The firm's senior analyst David Hallerman had originally forecast growth of $11.5bn: Says he: "The reported results from Yahoo [WAMN: 21-Apr-05] and Google showed I was being too conservative."

An IAB analysis of 2004 spend by category, shows ...

  • Paid search listing revenue jumped 40% to $3.9bn.
  • Display advertising such as banners rose 19% to $1.8bn.
  • Rich media, for example video ads, grew 10% to just under $1bn.
  • Online classified ads grew 18% to $1.7bn, representing a growing challenge to traditional newspaper classifieds.
  • Consumer goods companies accounted for nearly half of all online ad spending in 2004, while financial services firms made up 17% of the total revenue.
The present growth surge is attributed by most analysts to the rise and rise in broadband internet connections, which now account for over fifty percent of US residential visits to the web.

Data sourced from; additional content by WARC staff