Online advertising to hit $1.5 billion: IAB Canada

The Interactive Advertising Bureau of Canada has released its revenue projections for 2008 and the final breakdowns for 2007.

The Interactive Advertising Bureau of Canada (IAB) is projecting that online advertising revenues in Canada will hit an estimated $1.5 billion. That would represent a full 25% increase over the $1.2 billion achieved in 2007, a 38% jump over 2006 actuals, according to revised figures.(The response rate for the IAB survey was over 90% for companies with anticipated revenues over $5 million.)

Publisher revenues from online have quadrupled over the past five years, growing from $237 million in 2003. About 21% (or $260 million) of the 2007 revenues went to French Canadian online properties.

In advertising vehicles, search led the way with $478 million, followed by display at $432 million, classifieds/directories at $305 million, email at $17 million and video at $9 million. By category, auto advertisers led the way at 16%, followed by financial at 11%, technology at 10%, retail at 9%, media/entertainment at 8%, telecommunications at 7%, leisure (travel, hospitality) at 7%, packaged goods at 6% and ‘other’ at 26%.

IAB Canada president Paula Gignac says the growth in online advertising in Canada speaks to ‘how important the medium has become to marketers in terms of its ability to reach, target, engage and dialogue with consumers. The sky’s really the limit for online, as new developments in targeting technology, creative – it’s great to have our first Video advertising revenue number – and integrated strategies are happening on an almost daily basis. Online advertising is no longer below the line in any way.’

The process for the 2007 revenue survey was adjusted due to shifts in the industry, such as mergers and acquisitions and continued penetration of ad networks, and the changes were designed to eliminate duplication of ad revenue. Publishers applied the new methodology to both 2006 and 2007 numbers – which meant revising the 2006 actual online ad revenue from $1 billion to $900 million and adjusting all segments accordingly.

‘The industry can feel confident about all past and present numbers,’ says Martin Lundie, partner, technology, communications and entertainment assurance and advisory business services for Ernst & Young LLP (who analyzes IAB Canada’s Survey data). ‘Firstly, because the factors we adjusted for in the 2007 survey were not present prior to 2006; and secondly, because of the extremely high rate of response.’

The New York office of the IAB also revised its ad unit and rich media creative guidelines this week, aiming to simplify the online ad buying process. The guidelines cover common ad formats and sizes, page take-overs and tear-backs, and define rich media as separate from basic animated ads because they require interaction aside from the ability for the user to click-through. The IAB released a compliance program for interactive publishers, who can now display a seal on their website.