A report released by the Priceware House Coopers & Interactive Advertising Bureau shows that internet advertising increased by 10.6% in 2008 from the year before. Even while the US economy was dipping in the last quarter of 2008, the internet ad spending was still increasing at 2.8% over the same period last year.

The video ads saw a meteoric rise. Internet Advertising spend in the Digital video category shot up from $324 million in 2007 to $734 million in 2008. The Internet advertising in the United States grew to $23.4 billion in 2008.

You can read & download the PwC 2008 Internet Ad Spending Report from the IAB website. The report includes data reflecting online advertising revenues from Web sites, commercial online services, Email providers, as well as other companies selling online advertising.

According to the report, some ad formats are performing better than the others:

• Search advertising is holding up relatively well, at $10.5 billion for 2008, up 20%
• Display ads, the second-largest category, are suffering slower growth — up 8% to $7.6 billion in 2008

The chart below (courtesy Media Post) shows the distribution of the 4th quarter 2008 advertising formats & their performance.

According to reports in the NY Times & the Wall Street Journal for Internet Ads spending in 2008, a few other points worth noting, especially for bloggers who make money online from ads, internet affiliate business owners &

• Performance-based ads (CPA ads, Shopping ads etc) made up 57% of all Internet advertising in 2008, according to the report, up from 51% in 2007
• CPM ads performance fell to 39%, from 45%
• Sponsorship advertising, where publishers create custom pages and advertisements for brands, was less popular this year than last: it fell to 1% of all fourth-quarter revenue in 2008, down from 3% in 2007

The major spend in the internet advertising came from the consumer-packaged goods companies (CPG), rising to $1.5 billion in 2008, up from $925 million in 2007.

Market researcher eMarketer predicts that online-ad spending will grow 4.5%, to $24.5 billion, compared with a previous prediction of 8.9%.