Online advertising revenues "exploded" in 2004 and 2005, according to the annual revenue survey by the Interactive Advertising Bureau of Canada (IAB).

Online ad revenues were confirmed at $364 million in 2004, up 54% from 2003, and are expected to grow by another 43% in 2005 to reach $519 million by the end of the year.

Display advertising, where graphical banners are placed on a webpage, accounted for the largest share of the online ad revenue pool, followed by search advertising.

Onlne advertising revenue breakdown for 2004:

• 45% - Display ads
• 30% - Search advertising
• 22% - Classified/Directories/Direct Response
• 3% - Email

"These numbers confirm what we have been feeling in the market for some time now," says Brent Lowe-Bernie, Chair of the IAB. "Investment in the Online channel is increasing at an explosive rate as advertisers and their agencies follow the movement of consumers, and optimize learning from research such as the IAB's publisher-supported Canadian Media Optimization Studies (CMOST)."

"And, there's still plenty of room for growth in 2005 and beyond," says Paula Gignac, Executive Director of the IAB. "Recent research by Ipsos-Reid's shows that the Internet has eclipsed Radio in popularity among all wired Canadians, and actually trumps TV in the 18-34 demographic. In the U.S., Online's share is already at 8 percent, and growing steadily in response to similar media consumption shifts. Yet at the 2004 level of $364 million, Online advertising still represents just 4 percent of the total advertising dollars spent in Canada. Clearly, a wealth of opportunities still exist for advertisers to tap into the channel in order to build their businesses."

A copy of the full Internet Advertising Revenue Report can be downloaded from iabcanada.com

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