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April 19, 2012

Internet Advertising Grew 22 Percent in 2011; Industry Worth $31 Billion, Says Study

By Tracey E. Schelmetic, TMCnet Contributor

How much is Web-based advertising worth nowadays? The number seems mind-boggling. According to a new study released this week, revenue from Internet-based advertising in the United States hit an astonishing $31 billion last year. That represents a 22 percent jump from 2010's figure of $26 billion.

These numbers are courtesy of the Interactive Advertising Bureau, an industry group that conducts quarterly studies on the topic in conjunction with PricewaterhouseCoopers (News - Alert).

But of course, Internet ads come in many different flavors, so it's important to understand the breakdowns of these numbers. About half of the Internet ad revenue, or $14.8 billion, was search. These are highly targeted, keyword-based ads sold by Google (News - Alert) and other search engines.

While keyword-based ads may be the bread-and-butter of the online ad industry right now, the fastest-growing category (though still small compared to the search category) by far was mobile, with revenue of $1.6 billion in 2011, more than double the $600 million a year earlier, according to the Associated Press (News - Alert), which reported on the study today.

The potential growth in the mobile category is nearly unlimited, say experts. What mobile ads have that keywords ads don't is the ability to target by location and proximity. It has a unique ability “to deliver timely, targeted, relevant and local advertisements in a manner that was not previously possible,” said David Silverman, a partner with PricewaterhouseCoopers.

So who is buying all this online advertising? Consumer retailers accounted for the biggest chunk, about 22 percent. 

Edited by Jennifer Russell
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