August 4 , 2009

Online ad revenue grows to $1.6B, surpasses radio
Category shows 29% increase in 2008

The Interactive Advertising Bureau of Canada (IAB) announced last week that Canadian online advertising revenues exceeded budgeted expectations of $1.5 billion, and grew by 29 per cent in 2008 to just over $1.6 billion.

Publisher revenue from online advertising in Canada has more than quadrupled over the past five years - building from $364 million in 2004 to the $1.6 billion mark in 2008 -surpassing 2008 radio revenues of $1.55 billion in the process.

Online advertising now occupies third spot in terms of both time spent by consumers with media, as well as marketing spend by advertisers, representing a full 11 per cent of the combined $14 billion spent on all major media in Canada.

Of the $1.6 billion, approximately $317 million or 20 per cent of online ad revenue was received by French Canadian online publishing properties, representing year-over-year growth of 22 per cent.

Search advertising (at 38 per cent of total revenues), continues to lead in terms of share of dollars, followed by display at 31 per cent, and classifieds at 30 per cent. Online video advertising grew by 33 per cent from its relatively small base of $9 million in 2007 to $12 million in 2008, while email advertising stayed stable at approximately $18 million.

2008 Canadian online ad revenue by advertiser category was also tabulated, and was as follows:

• Automotive - 13%
• Financial - 11%
• Technology - 10%
• Telecommunications - 9%
• Packaged Goods - 8%
• Media & Entertainment (music, film, TV) - 6%
• Leisure (travel, hotel, hospitality) - 6%
• Retail - 5%
• Other - 32%.

“Even in the face of uncertain economic conditions and continued pressure on total advertising budgets, clearly, online advertising has cemented itself as a mainstay in the overall media buy,” says Paula Gignac, President, IAB Canada. “And although 2009 has presented substantial challenges to the entire Canadian marketing community, we’re confident that online advertising will continue to grow at the projected pace, for the simple reason that as the internet continues to engage and delight consumers, it matches these accomplishments with a persistent ability to deliver measureable advertiser results.”