US online advertising grow 37%

Out of a busy week for me, I wanted to share these numbers released by IAB and PwC about Online advertising investment in the US for the first half of 2006.

The US online advertising spend over H1 2006 totaled $7.9 Billions growing 37% from H1 2005, exceeding for the first time $4 Billions in Q2 2006. This marks the 7th quarter of consecutive growth for online advertising, reinforcing the growing importance of online focus for our marketing spend compared to traditional media.

As you can see in this table, paid search accounts for 40% of total online spend, still the mainstream online advertising technique. One of the major advantage of online advertising is performance based pricing i.e. you pay for the click through (CPA) rather than the impression (CPM). The split between CPM and CPA is still very much balanced, respectively 48% and 47% of total investment. My advice: you should weigh on your media planning agency to favor performance based pricing deals as this is the way of measuring your campaign impact and adjust it in real-time.

However, and following Yahoo CEO Terry Semel speaking at a Goldman Sachs conference on Sept 19th and warning about a slower online ad growth, overall slowing of the U.S. economy impacts advertising and its online part for the remaining part of 2006, reports Ad Age Digital. eMarketer has lowered its ad-spending forecast this year from $16.7 billion to $15.9 Billion.

The missing one here? Marketing 2.0 of course. No one talks about the share of investment that brands are putting in viral marketing and user generated content techniques. This of course does not account for many dollars, but can reinforce significantly synchronized traditional campaigns results. After all, we are more interested in business results than pure awareness when it gets down to reporting to our CEO.