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IAB Canada Newsletters
2007 Canadian Online Advertising Revenue Climbs To $1.2 Billion
Online Ad Revenue Grows 38% Over 2006 levels, Quadruples Over Just 5 Years
TORONTO, July 3, 2008 - The Interactive Advertising Bureau of Canada (IAB) today announced that 2007 Canadian Online Advertising Revenues climbed to just over $1.2 billion for the year -- a 38% increase over 2006 actuals.
Publisher revenue from Online advertising in Canada has more than quadrupled over the past five years -- building from $237 million in 2003, to the $1.2 billion mark in 2007 -- and is quickly closing in on more established mediums.
Of the $1.2 billion, approximately $260 million or 21 percent of ad revenue was received by French Canadian Online properties, representing year-over-year growth consistent with the rest of the Canadian market.
In response to a variety of shifts in the industry (including a high level of merger and acquisition activity in the Canadian media market, and the continued penetration of Online Ad Networks into the Canadian Online advertising space), IAB Canada's 2007 Revenue Survey process was revisited, with the objective of assuring the elimination of any past and ongoing duplication of ad revenue from these sources.
Canadian Online Publishers obviously had no difficulty in adjusting to the revised ask, as IAB Canada's 2007 Canadian Online Advertising Survey garnered a response rate of over 90% for companies with anticipated revenue of over $5 million. "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 response rate. Surveys with a high response rate from respondents with the most significant size, provide a very high degree of accuracy and reliability."
Publishers applied the improved methodology to both 2006 and 2007 numbers, and as a result, the actual Canadian Online Advertising Revenue for 2006 has been revised from $1.0 billion to $900 million, with all segments revised accordingly below.
In actual millions of dollars, 2007 vs. 2006 Canadian Online Ad Revenue by Advertising Vehicle, breaks down as follows:
2007 Canadian Online Ad Revenue by Advertiser Category was also tabulated, and was as follows:
Automotive - 16%;
Media + Entertainment (Music, Film, TV) - 8%;
Financial - 11%;
Leisure (Travel, Hotel, Hospitality) - 7%;
Packaged Goods - 6%;
Retail - 9%;
Technology - 10%;
Telecommunications - 7%; and,
Other - 26%.
IAB Canada's projected total for 2008 Online Advertising Revenue in Canada is estimated to be $1.5 billion - a full 25% percent more than the 2007 actuals of $1.2 billion.
"The current and continued projected growth in Online advertising in Canada speaks volumes about how important the medium has become to marketers in terms of its ability to reach, target, engage and dialogue with consumers," says Paula Gignac, President, IAB Canada. "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 -- all with the goal of helping marketers capitalize on Online's ever-growing and engaged audience. Online advertising is no longer below the line in any way -- it's now an essential component of any marketing mix."
And while Online Advertising is growing at an enviable pace compared to advertising growth in other media in Canada, the industry is not without its challenges. "When asked to identify possible business constraints for 2008, Publisher respondents to IAB Canada's Survey identified hiring and retaining qualified staff, as well as the current economic climate, as the two biggest challenges they will grapple with for the remainder of the year," says Martin Lundie, Ernst & Young LLP.
"The industry has indeed been resource-challenged as a result of its own success," says Paula Gignac, President, IAB Canada. "In response, IAB Canada has developed a robust strategy to educate, attract and retain talent within the industry as we go forward. To date, over 2500 professionals across various media and advertising sectors have been educated via IAB Canada Courses in Interactive Marketing + Online Advertising and Social Media Marketing; the organization is actively assisting its members with both off- and Online recruiting initiatives; and, has recently embarked on a Digital Salary Survey in association with Marketing Magazine, designed to help HR departments within Publisher, Agency and Advertiser operations determine the proper compensation for their most-advertised positions."
"As far as the economy is concerned, I think Canadian Online Publishers are being appropriately prudent in identifying this as an important factor to monitor in 2008. But, if U.S. Online advertising results for the last two quarters of 2007 and first quarter of 2008 are any indication, Online advertising's inherent accountability is a strength that becomes even more valuable to marketers in the midst of troubled economic times. South of the border, Internet advertising is still growing at a record pace -- despite a prolonged economic downturn -- so, we would expect Online advertising in Canada to show the same sort of resiliency, should any prolonged economic dip materialize here as well."
About IAB Canada's 2007-08 Canadian Internet Advertising Revenue Report
The 2007 Canadian Internet Advertising Revenue and the 2008 estimated Canadian Internet Advertising Revenue were reached after a comprehensive survey of all major Online Publishers in Canada. Revenue data was compiled and analyzed by Ernst & Young LLP.
Download IAB Canada's 2007-08 Canadian Internet Advertising Report
For more information contact:
Paula Gignac
President, IAB Canada
iabcanada.com
416-598-3400 (ext. 26)
The Interactive Advertising Bureau of Canada (www.iabcanada.com), is the national voice and de facto thought leader of the Canadian Interactive marketing and advertising industry, and is a not-for-profit association representing Canada’s most well-known and respected Advertisers, Agencies, Media Companies, Service Associates, Educational Institutions and Government Associations.
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