IAB: Internet Advertising Reached $26 Billion In 2010, Display Grew Twice As Fast As Search
The Internet Advertising Bureau released its numbers for 2010 (PDF). Last year, online advertising in the U.S. grew 15 percent to $26 billion. After a 3 percent dip in 2009, growth resumed in 2010, hitting a record high.
Context & Ripple Effects
This is the rebound report. The IAB and PricewaterhouseCoopers, who have compiled these figures together since at least the mid-2000s, had charted an unbroken climb through the last decade — a record close to $17 billion in 2006, then nearly $10 billion in just the first half of 2007 — before the market posted its 3 percent dip in 2009.
The 2010 numbers matter less for the record $26 billion itself than for the mix inside it: display grew twice as fast as search, which reads as brand budgets coming back off the trough rather than just more direct-response spend. The IAB's own framing across its reports has treated each year's total as the scoreboard for whether online is eating further into traditional media budgets.
First-order effects
- Publishers and ad networks whose inventory is display-weighted are selling into the market's fastest-growing segment, while search-heavy players keep the larger base but cede the growth rate.
- Agencies that cut brand-display budgets hardest during the 2009 dip have a top-line signal from the IAB that the pullback overshot.
Second-order effects
- Faster display growth puts more impression volume into exchanges and networks competing on price, tightening CPM pressure on undifferentiated remnant inventory even as premium placements benefit from renewed brand demand.
- Search's role as the default claim on incremental online dollars weakens, forcing search platforms to compete harder for brand-oriented budgets they historically left to display.
Third-order effects
- If display keeps outgrowing search, online advertising consolidates its case as a full-funnel brand medium rather than a direct-response channel, putting it in more direct contention with television for the largest pools of ad money.
- The pattern also entrenches the IAB/PwC dataset as the industry's standard scoreboard, raising the stakes of each semiannual release for how publishers and investors read the market's direction.
The trend: Internet advertising is maturing from a search-led, direct-response channel into a broader brand medium in which display formats set the growth pace.