Online advertising revenues in Canada were higher than expected for 2008, according to a new report from the Interactive Advertising Bureau of Canada.
Online ad revenues exceeded $1.6 billion last year, representing a 29% jump from 2007 and surpassing the IAB’s $1.5 billion projection for 2008, reveals the Canadian Online Advertising Revenue Survey, released this morning.
Internet ad revenues also jumped ahead of radio ad revenues ($1.55 billion) into third place in the country’s media pecking order, behind television and newspapers. Of the $14 billion spent on media advertising in Canada last year, 11% was spent on Internet advertising. This percentage nearly equalled that of the U.S., where 12.5% of ad revenues come from Internet advertising, said Paula Gignac, president of IAB Canada.
“I like the fact that Canada has caught up with the U.S., and we could see more movement there next year as well,” she said.
Online publishers booked $602 million worth of search advertising in 2008, accounting for 38% of all Internet ad revenues. Display advertising represented 31% of revenues ($490 million), while classified ads brought in 30% ($480 million).
Video advertising, which accounted for only $12 million of total online ad revenues in 2008, is growing quickly. In 2007, it represented just $9 million in revenues.
Confusion stemming from the new collective bargaining agreement negotiated by the nation’s actor’s union may have actually slowed growth in video advertising, said Gignac.
“In 2008, we just had that ACTRA agreement that came out, so it took a little while for the industry to figure out the digital advertising rights issues involved with video advertising,” said Gignac. “In 2009 I think you can expect those numbers to increase because the digital rights are not an issue. They’re so affordable for everyone.”
Automotive advertisers were the most active in the online space, contributing 13% of all Internet ad revenues. The financial (11%), technology (10%) and telecommunications (9%) sectors followed closely behind. Packaged goods (8%), media and entertainment (6%), leisure (6%) and retail (5%) also spent significantly on Internet advertising.
Gignac was particularly encouraged by the boost in spending from packaged goods companies, which accounted for just 6% of 2007 revenues.
“That’s something that we’ll watch going forward, because now that we have Kraft, Unilever and Procter & Gamble moving heavily into the space, we should see some changes,” said Gignac.
Online publisher revenues have increased dramatically in the past five years, from $364 million in 2004 to last year’s $1.6 billion figure. The IAB expects the trend to continue, forecasting revenues of $1.75 billion for 2009.
Data for the Canadian Online Advertising Revenue Survey was compiled by Ernst & Young LLP based on responses from Canada’s major online publishers.
