Online advertising in the USA continues to boom, according to latest data from the Interactive Advertising Bureau.

Ad revenues rose 26% to a record $2.8 billion (€2.28bn; £1.52bn) in the first quarter, compared with the same period in 2004.

Search advertising is the growth driver, accounting for 40% of industry revenue, says Greg Smart, president and ceo of the New York-headquartered IAB.

Analysts are predicting growth in video advertising online as more consumers switch to faster broadband connections, which also help to increase online retail spend in the US.

The Internet Retailer 2005 conference in Chicago learned that shoppers spent more than $65bn on internet purchases last year, an increase of 26% from 2003.

Dan Hess, svp at consumer behavior consulting group ComScore, told delegates that around 50% of all internet users have broadband access. It makes online shopping easier and, as a consequence, consumers spend more.

Mary Brett Whitfield, svp at consultants Retail Forward, says 52% of internet users shop online, but just 4% of these cite shopping as their primary reason for logging on.

She adds most consumers use the internet for pricing purposes, whether searching for sales and promotions, searching for specific prices or comparing retailers' prices.

Data sourced from Wall Street Journal Online; additional content by WARC staff