Oct 9, 2007 6:03 AM

U.S. marketers spent $10 billion on online advertising in the first half of this year, increasing their Web ad budgets by about 26% compared with the first six months of 2006, according to the latest version of the Interactive Advertising Bureau’s quarterly ad report.

The IAB study, conducted by PricewaterhouseCoopers, also found that online ad spending increased sequentially from Q1 2007 to Q2, posting a 4% increase to $5.1 billion. That figure also represents a 25% year-over-year increase in Internet advertising.

The report found that consumer advertisers dominated Web ad spending, accounting for $5.4 billion in ad revenues during the quarter or 54% of spending. That was up from 49% during the same period in 2006.

Among those consumer-related advertisers, retail led the category during the first half of the year with 46% of that $5.4 billion in spending. During the same period, the automotive sector accounted for 21% of online ad budget in the consumer category, while leisure (travel, lodging and hospitality) accounted for 13%, entertainment for 9% and packaged goods for 8% of Internet ad budget.

Financial services made up the second-largest category of online spending in the first half of 2007. Ad revenue for that sector accounted for 15% of the total, or $1.5 billion—a small decrease in share from the 16% spent on marketing finance on the Web during the same period last year.

Telecom advertising remained steady year over year at 8% of online spending, or $799 million, in the first six months. Media marketing also held at last year’s share of budget, accounting for 6% of online ad spending in the first half of 2007.

Among ad channels, search marketing led in spending during the first half, accounting for 40% of Q2 revenue. Display ads followed with 22% of spending, followed by classifieds (17%) and lead generation (8%).

“These results are really no surprise but very welcome news,” IAB president and CEO Randall Rothenberg said in a statement. “More and more marketers have embraced the reality that interactive is the fulcrum on which their brand strategies need to be based, and we expect robust growth to continue.”

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