The retail industry continues to be the biggest online ad spender in the US, according to the latest revenue report from the IAB and PwC. Retail advertisers accounted for 20% of the $17 billion in first half (H1) revenues, or $3.4 billion. Interestingly, though, that’s actually a decline from H1 2011, when the retail industry accounted for 24% of ad dollars, or $3.5 billion. So, while overall online ad revenues rose 14% year-over-year in H1, retail ad spending was stagnant.
Behind the retail industry, auto advertisers accounted for 13% share of online ad revenues (up from 11% last year), as did financial services advertisers (unchanged from H1 2011). In the 4th spot, telecom accounted for 12% of online ad revenues, down from 14% last year, while the 5th-largest verticals, computing products and leisure travel, accounted for 8% of revenues.
Online Ad Revenues Still Highly Concentrated
Further analysis from the report indicates that online ad industry revenues are highly concentrated, with 73% of Q2 revenues going to the 10 leading ad-selling companies, up slightly from 72% in Q2 last year. Companies ranked 11th to 25th accounted for another 9% of revenues, while those ranked 26th to 50th pulled in another 8%. In total, then, the top 50 ad-sellers controlled 90% of the online advertising market in Q2, a level fairly consistent with previous years.
Two-Thirds of Revenues Priced on Performance Basis
Meanwhile, in H1, 67% of online ad revenues were priced on a performance basis, up from 64% in H1 2011. This model has been on a consistent upward trend for several years now, and is up from 46% of revenues in 2005. Pricing on a cost-per-thousand (CPM) or impression basis accounted for 31% share of revenue in H1 this year, with this model seeing the opposite trend over time. Hybrid pricing has almost disappeared as a pricing model over the years, down from 13% of revenues in 2005 to 2% this year.