The entire internet advertising market was estimated at $21B in 2007

The Interactive Advertising Bureau (IAB) has today released its estimation about the total online advertising market for the entire 2007, which was said has been over $21B with nearly $6B in Q4 2007. 

Both IAB and PwC say that this is yet another record year measured year-over-year – a 25% increase over the previous revenue record of nearly $16.9 billion for full year 2006.

Other research companies like the Kelsey Group and IDC put U.S. Internet advertising for 2007 at $22.5B and $25.5B respectively. The Kelsey Group also provides a global estimate of $45 billion for Internet advertising, which is 7.4 percent of the total $600 billion global advertising market. This perhaps can explain why 2007 was full with deals for any type and size of online ad networks, companies and exchanges. We do expect the trend to be preserved for the next 2 years. The internet advertising market in its various types and media is growing more than ever before and is creating huge opportunities for all new entrants as well as for the serious players like Google, which is the dominant force on the market of online advertising with over $10B in annual revenues from contextual ads.

“Interactive media continue their unabated growth,” said Randall Rothenberg, President and CEO of the IAB. “There is no media as measurable as interactive, and they provide products and services at the precise moment a consumer desires them. I applaud the industry on maintaining this extraordinary momentum of innovation, which has fundamentally changed the way we live today.”

“The record $21.1 billion year of interactive advertising is the culmination of consecutive record quarters throughout 2007,”said David Silverman, partner, PricewaterhouseCoopers. “The continued record growth evidences the importance and uniqueness of interactive media to both consumers and the marketers that are trying to reach them.”

The IAB sponsors the Internet Advertising Revenue Report, which is conducted independently by PricewaterhouseCoopers. The full report is issued twice yearly for full and half-year data, and top-line quarterly estimates are issued for the first, third and fourth quarters. Fourth quarter and full-year online ad revenue estimates result from surveying and aggregating data from the top 15 online ad sellers, and then extrapolating those to calculate the total estimated industry revenue figure.

Some people have commented online that they think this is causing Google’s stock to drop today with almost 6%. Their current market cap is roughly $144B which is more than 6x the total market for their entire industry per year. That’s also half of what Microsoft has offered for Yahoo! alone.

About PricewaterhouseCoopers
PricewaterhouseCoopers ( provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 146,000 people in 150 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

About the IAB
Founded in 1996, the Interactive Advertising Bureau ( represents over 375 leading interactive companies that actively engage in and support the sale of interactive advertising. IAB members are responsible for selling over 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the continuing growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB evaluates and recommends standards and practices, fields interactive effectiveness research, and educates marketers, agencies, and media companies, as well as the wider business community, about the value of interactive advertising.

About The Kelsey Group’s Annual Forecast
The Kelsey Group has published a five-year forecast covering the broadly defined directional and Internet media market annually since 2003. The firm draws from its proprietary data, primarily the Local Commerce Monitor, User View and Global View studies, as well as from company, industry and country information in the public domain. Further, Kelsey Group analysts engage clients and non-clients in numerous discussions about the direction and pace of development in the local media marketplace. The Kelsey Group’s Annual Forecast is available to clients of the firm’s continuous advisory services. This forecast does not include mobile ad platforms. The Kelsey Group’s mobile forecast, released in September 2007, will be updated later in 2008.

About The Kelsey Group
The Kelsey Group is the leading provider of research, data and strategic analysis on directories, small-business advertising, online local media, vertical market advertising and mobile advertising. Founded in 1986, the company has built a reputation as the premier analyst firm covering the directory publishing community and the emerging local search marketplace, providing advisory services (The Kelsey Report®, Interactive Local Media and Marketplaces), publishing (Global Yellow Pages™), consulting (more than 400 individual assignments) and conferences (71 events).