NEW YORK: Online advertising enjoyed its best year ever in 2006, according to the latest data released by the Internet Advertising Bureau. Revenues soared 35% year-on-year to $16.9 billion (€12,53bn; £8.50bn), boosted by a record ad-dollar inflow of $4.8bn in Q4.

Display ads and search placements both enjoyed robust growth of 31%, the former notching revenues of $5.4bn and the latter $1.4bn. However, growth in search advertising dipped marginally from 41% in 2005 to 40% last year.

Arguably the most significant factor in the IAB's report, prepared by PricewaterhouseCoopers, is the acceptance of online as a major element in brand marketing - countering the medium's once-heavy weighting toward direct response ads.

Among the industry sectors highlighted in the report, packaged goods showed the highest growth, more than doubling 2005 spend to $1.4bn. Carmakers also increased their already significant presence on the web, with revenues rising 48% to $3.7bn.

The internet now accounts for about 5.9% of the total US adspend pie and is in sight of overtaking radio, which in 2006 generated $21.67bn in ad revenues.

Says IAB chief executive Randall Rothenberg: "We have every confidence this growth will continue as marketers allocate more of their total marketing dollars to interactive and the industry delivers effective and innovative platforms for connecting with consumers."

Data sourced from AdWeek (USA); additional content by WARC staff