Highest First-Quarter Revenue Level on Record According to IAB and PwC

23% Year-Over-Year Increase Demonstrates Growing Importance of Digital Marketing & Advertising

NEW YORK, NY (May 26, 2011) — Internet advertising revenues in the U.S. hit $7.3 billion for the first quarter of 2011, representing a 23 percent increase over the same period in 2010, according to figures released today by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC). This marks the highest first-quarter revenue level ever for the industry and a significant increase over last year’s first-quarter revenue level, which had been the highest on record to date.

“The consistent and considerable year-over-year growth we’re seeing demonstrates that digital media is an increasingly popular destination for ad dollars, and for good reason,” said Randall Rothenberg, President and CEO of the IAB. “As Americans spend more time online for information and entertainment purposes, digital advertising and marketing has emerged as one of the most effective tools businesses have to attract and retain customers.”

“The year-on-year 23 percent increase in first quarter revenues is not just impressive in its own right, but especially so when you take into account the fact that 2010 was a record-breaking year itself for Internet advertising revenue,” said David Silverman, a partner at PricewaterhouseCoopers LLP. “These numbers indicate that the interactive advertising field hasn’t simply bounced back since the recession; it’s growing with dynamic energy.”

The following chart highlights quarterly ad revenue since 1999; dollar figures are rounded.

The IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The results are considered the most accurate measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertising on the Internet. The survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising.

via: iab.net

Thanks to the massive popularity of Facebook and the addictive appeal of real-time simulation games, gaming on social networks has gained widespread adoption.

According to a BlogHer/iVillage study, about 22 percent of adult U.S. Internet users played casual games daily in March 2010. A study from ThinkEquity estimated that 79 million people will play social games in the U.S. in 2012, up from 47 million in 2009. As the social gaming audience continues to grow, so will revenue from direct and indirect payments and advertising, resulting in more than $720 million, according to ThinkEquity. By 2012, the market is expected to reach $2.18 billion.

U.S. direct-paying users are expected to generate $1.19 billion in revenue by 2012, up from $340 million in 2009. Indirect-paying users -- defined as those who opt-in to advertising offers attached to social games -- will inject $868 million into the industry in 2012, up from $324 million in 2009. Social game advertising revenue will double to $124 million in 2012. "Social gaming represents opportunity for marketers," said Paul Verna, a senior analyst at eMarketer. "In the coming months, expect to see more marketers muscling into the social gaming space through brand marketing tactics such as display ads, video ads, custom games, in-game enhancements, product placements and sponsorships."

Reuters is reporting that two sources told them that Facebook’s 2009 revenue was between $700 to $800 million in 2009, which if true would be a couple hundred million higher than previous outside estimates.

Facebook is a privately held company and under no obligation to report earnings to the public, and Reuters said that the company declined to comment on the report. The report also said that Facebook made a net profit “in the tens of millions” last year.

$800 million is frankly not that unbelievable, as Facebook saw rapid growth in 2009 – from about 150 million active users at the beginning of that year to over 350 million at the end – that coincided with a number of mega-brands launching Pages and ad campaigns on the site. Of course, this is even more impressive as the United States was in a deep recession for almost all of 2009.

If we take the halfway point in users, say 250 million, and the halfway point of the Reuters revenue estimate, say $750 million, then Facebook made about $3 per active user in 2009 (we suspect that this will continue to rise in the future – $10 per user isn’t that far of stretch to us). If everything stays constant, then we’ll assume the 500 million users right now will be the halfway point, so at $3 per user, Facebook (again if everything is stays more or less constant which is of course not a given) then Facebook should reasonably expect to make $1.5 billion in 2010.

Posted by Chad Catacchio on http://thenextweb.com

Mobile apps are the hot thing to have—among marketers and device users alike.

The rush to smartphones and the desire for more apps at an increasing price will lead to an explosion in application store revenues by 2014, according to the Yankee Group.

The research firm previously forecast $537 million in US app store revenues but now expects the stores to pull in $1.6 billion this year. Revenues will be nearly six times as high in 2014, at $11 billion.

Yankee Group revised its forecast based on several factors, including the increase in use of paid apps. Nearly one-third of apps downloaded are purchased, up from 18% a year ago. Further, individual app prices have risen. The average paid app costs $2.85, compared with $1.99 last year. Increased smartphone shipments also fuel the rise in app store spending.

The iPhone remains a darling, with users downloading three times as many apps a year on average, but other smartphones and carriers are gaining ground.

"Apple's innovative one-click technology and AT&T's exclusive deal for the iPhone put them ahead for now," said Carl Howe, director at Yankee Group, in a statement. "But strong results from T-Mobile suggest that Android will be the next breakout smartphone app platform."

Worldwide, Gartner predicted in January that app store revenues would reach nearly $6.8 billion in 2010, increasing to nearly $30 billion by 2013.

But Gartner also predicted an increase in the proportion of app downloads that were free.