Canadian Online Ad Revenues Surpass Estimates

A new report asserts that Canadian investment in the online channel is increasing at an “explosive” rate.

September 12, 2005 – Online advertising in Canada will exceed 500 million Canadian dollars this year, according to the annual revenue survey by the Interactive Advertising Bureau of Canada (IABC).

The IABC estimates that the year-end total for online advertising will be CAD 519 million, a full 43% more than in 2004. The figure exceeds the IABC’s own earlier estimates by 18%.

“These numbers confirm what we have been feeling in the market for some time now,” said Brent Lowe-Bernie, chairman of the IABC. “Investment in the online channel is increasing at an explosive rate as advertisers and their agencies follow the movement of consumers.”

According to Kubas Consultants, the online customer base rose by 5% between 2004 and 2005 in Canada.

The IABC says the 2004 online advertising was up 54%, rising to CAD 364 million from CAD 237 million in 2003. Of last year’s total, approximately CAD 65.5 million (18%) of the ad dollars were from the French Canadian market.

Display advertising garnered the largest portion of the online ad pie with 45% of total revenues, while search advertising grew to a 30% share. Classified/directories/direct response had 22% of total revenues and e-mail accounted for 3%.

“Clearly, a wealth of opportunities still exist for advertisers to tap into the channel in order to build their businesses,” said Paula Gignac, Executive Director of the IABC. “At the 2004 level of CAD 364 million, online advertising still represents just 4% of the total advertising dollars spent in Canada.”

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