NEW YORK, NY — The annual Internet Advertising Revenue Report revealed revenues climbed to $21.2 billion in 2007, outstripping 2006’s performance by 26-percent and replacing 2006’s record for digital revenues. The annual and quarterly figures in the report represented the fourth consecutive year and the 13th consecutive quarter of record expenditures online.The report, released last week by the Internet Advertising Bureau and PricewaterhouseCoopers LLP, indicated year-over-year dips in the market share, but not the spending, in only two categories — classified ads and lead generation — both of which fell by 1-percent.

During the fourth quarter alone, internet advertising generated revenues totaling $5.9 billion, a 24-percent increase over the same period during the previous year.

“This achievement is a testament to the continued vitality of interactive [advertising],” said IAB President and Chief Executive Officer Randall Rothenberg. “Explosive innovation in the industry is providing marketers with new and unique ways to reach consumers. It’s a very exciting time.”

Advertising to consumers remained the largest category of interactive spending at 55-percent of 2007 full-year revenues, up from 52-percent in 2006. Keyword search remained the largest category of non-display advertising, with 41-percent of all non-display dollars going to that effort.

Between 2006 and 2007, the dominant pricing model shifted from cost-per-impression to performance deals. The latter category rose from 47-percent to 51-percent of all interactive dollars. Cost-per-impression dollars dropped from 48-percent to 45-percent.

For the first time, digital video advertising was measured. It garnered a 2-percent market share, or $324 billion.

“Despite the current state of economic uncertainty, 2007 was another record year,” said David Silverman, a partner in the Assurance Division of PricewaterhouseCoopers. “Interactive advertising is not just the future; it is the here and now. It represents a meaningful and growing component of U.S. advertising and marketing spend.”

Conducted by the New Media Group of PricewaterhouseCoopers, the Internet Advertising Revenue Report was launched in 1996 by the IAB. It aggregates data from all companies that report meaningful online advertising revenues from websites, commercial online services, free e-mail services and other categories. The results are considered the most accurate measurement of interactive advertising revenues.