2005 Canadian Internet Advertising Grows by 54 Percent Over 2004

Canadian Internet Advertising Revenue To Top $801 Million in 2006

TORONTO, July 26, 2006 - The Interactive Advertising Bureau of Canada today announced that 2005 Canadian Internet Advertising Revenues reached a new high of $562 million dollars for the year. The 2005 actuals represent an 8% increase over the $519 million originally estimated by the IAB for 2005; and a 54% increase over the 2004 figure of $364 million. Of the $562 million received by Canadian Online publisher sites in 2005, approximately $124 million or 22 percent of ad dollars were allocated to the French Canadian market.

Display advertising (including CPM and direct response banner advertising programs, plus sponsorship), continues to garner the largest portion of the Online advertising pie at 41 percent of total revenues, while Search advertising grew to a 35 percent share of all Online advertising in 2005. The remaining 2005 Online ad categories include Classifieds/Directories at 22 percent of total revenue, and E-mail at 2 percent.

"Advertisers have done a great job of responding with investment that matches the multitude of research studies which have pointed to huge leaps in consumer passion for, and time spent with the Internet channel," says Patrick Lauzon, Chair of the IAB. "And when you consider that Online is really the only media that can follow the consumer through the entire purchase cycle - from building product awareness and consideration, to allowing in-depth product research and even product purchase - it just makes sense."

And there's still substantial growth to come. The IAB's projected 2006 year-end total for Online advertising in Canada is estimated to be $801 million - a full 43 percent more than the 2005 figure - or over 6.4 percent of an estimated total $12.5 billion ad spend in Canada for 2006.

"There are two things that are important to note in the findings," says Paula Gignac, President of the IAB. "First, is how the IAB Canada Revenue Survey is in sync with trends shown in the U.S. and other markets, with Display advertising holding its own, while Search revenue grows at a faster pace. Second, is how the share of dollars allocated to Internet advertising (almost 7 percent of total ad spend in Canada for 2006), is quickly moving towards the 10-15 percent that cross-media optimization studies have long recommended as necessary to properly utilize the Internet channel."

"And while 7 plus percent is a good result, it's definitely shy of where Internet spending in Canada should be, given that there are over 21 million unduplicated users, or 62 percent of the total Canadian population Online every month. To compare, in the United States, only 57 percent of the total population uses the Internet every month.

"If we can get the Canadian industry to a billion plus dollars by 2007, and Internet spending closer to 9 percent of the total, then," says Gignac "we're really going to see a tipping point for the medium."

About the IAB 2005-06 Internet Publisher Revenue Report
A copy of the full report is available for download. The 2005 actual revenues and the 2006 projected revenues were reached after a comprehensive survey of all major Online publishers in Canada. The top 100 sites selling advertising in Canada were surveyed, with the study benefitting from a 49% response rate. Revenue data was compiled by Ernst & Young.

For more information contact:

President, IAB Canada
iabcanada.com

The Interactive Advertising Bureau of Canada is the national voice of the Canadian interactive marketing and advertising industry, and is a not-for-profit association representing a membership composed of publishers, agencies, advertisers and interactive service associates.

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