Online ad revenue up 2.6 pct in 4Q to $6.3 bln

(AP) -- Online advertising revenue grew by 2.6 percent in the fourth quarter, the first year-over-year increase in more than 12 months as companies became more comfortable with spending on marketing, according to report issued Wednesday.

The Interactive Advertising Bureau and PricewaterhouseCoopers LLP said fourth-quarter ad revenue rose to a record $6.3 billion. It was up by 13.8 percent from the third quarter.

"The worst of the economic impact on Internet advertising is over and that the seeds of growth have been planted," said David Silverman, Assurance partner at Pricewaterhousecoopers, in a statement.

Retailers were the biggest spenders, capturing 20 percent of revenue. They were followed by telecom companies, with 16 percent, and financial services firms at 12 percent.

For the year, online ad revenue fell by 3.4 percent to $22.7 billion, as the drag from the first three quarters of the year more than offset an upbeat fourth quarter.

Revenue from search ads took up nearly half of online ad revenue in 2009 while display ads comprised 35 percent. The fastest growth came in ads that appeared alongside online video, whose revenue increased 38 percent to $1 billion.

The Internet now attracts 17 percent of overall ad revenue that includes those from TV, radio, newspapers, consumer magazines. That's up from 8 percent in 2005, the report said.

©2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.