Figures for the last quarter of 2004 show revenues totalling a record $2.69 billion, marking the highest quarter ever reported, according to the Internet Advertising Revenue Report.Despite this, on-line advertising revenue accounted for only around 3.7% of the total ad-spend in the
US in 2004, up slightly from 3% in 2003.The bulk of the revenue is concentrated in the top 10 on-line ad sellers, who were responsible for 71% of the total revenue earned in the last quarter of 2004. Advertising that targeted national or non-local audiences accounted for 94% of 2004 fourth quarter revenues, says the report.The report shows that consumer advertisers continued to represent the largest category of advertisers, accounting for 49% of the 2004 annual revenues, up significantly from the 37% reported for the same period in 2003. The largest sub-categories under the consumer umbrella include retail, automotive, leisure, entertainment and packaged goods.The top ad format was search-based, accounting for 40% of the market, with classifieds, display and rich media continuing to grow at a healthy rate, says the report.With regard to pricing models, impression-based pricing was still the top choice for buyers and sellers, accounting for 42% of revenues, but performance-based deals grew to 41%, up from 37% in 2003."Interactive Advertising has clearly become a mainstream medium and one that can no longer be ignored as a critical piece of any marketing mix," said Greg Stuart, president and
CEO of the
IAB.