YNOT – The Interactive Advertising Bureau on Wednesday released its “state of the industry” report for 2010, indicating U.S. online advertising revenues reached a new high. Up 15 percent over 2009 levels, the record $26 billion in internet ad spending could indicate the beginning of an economic recovery, but more likely results from an increased reliance on digital media among advertisers across the spectrum, IAB analysts said.

Fourth quarter revenue also hit new highs at $7.45 billion, up 19 percent from Q4 2009 and 15 percent from Q3 2010.

Other highlights of the Internet Advertising Revenue Report, prepared based on a study conducted for IAB by the New Media Group of independent market research firm PwC, include:

• Search emerged as the most popular advertising format, representing 46 percent of revenue and 12-percent growth over 2009.
• Content sponsorship saw the most growth as a category, with an 88-percent increase over last year and a 142-percent increase in the fourth quarter alone.
• Display-related advertising — including digital video commercials, banners and other display ads, sponsorships and rich media — continued to grow during 2010, totaling nearly $10 billion with an increase of 24 percent over 2009 levels.
• The results exhibit revenue growth for the past five consecutive quarters.
• Performance-based advertising continues to displace more traditional impression-based pricing models. Performance-based revenues were up by 3 percent, versus a drop of 4 percent in impression-based revenues.
• For the first time, the report included estimated U.S. mobile advertising revenue: between $550 and $650 million during 2010.

“As the latest IAB Internet Advertising Revenue Report amply demonstrates, brand advertisers and marketers have adopted the power of digital media as a central element of their campaigns,” said IAB President and Chief Executive Officer Randall Rothenberg. “Consumers have shifted more of their time to digital media — watching television shows and movies online — and advertisers now accept this multifaceted medium as a key component for reaching their targets.”

According to PwC’s David Silverman, “With a strong rebound from 2009, the $26 billion spent on internet advertising points to a continued focus on digital media ad spend, with dollars catching up to the eyeballs. More time spent online, especially with increases in digital video and social media, has certainly helped to fuel the continued growth.”

IAB Senior Vice President for Industry Services Sherrill Mane said the figures could indicate online revenues, at least, have recovered from the massive worldwide economic downturn of the past two years.

“We now have had five consecutive quarters of growth since the great recession impacted interactive advertising in 2009,” Mane said. “The record-breaking revenue in Q4 2010 and the total year indicate that interactive advertising has weathered the storm and then some.”

The study incorporated data about online advertising revenues at websites, commercial online services, free email providers and other companies selling online advertising.