New figures released for the first quarter of 2007 show that the online advertising market continues to grow rapidly, with spend reaching $294 million, up 50% on the same period in 2006. Spend was, however, down 7% on the previous quarter, although this would be expected following the pre-Christmas peak and the January holiday period.

Search engines and directories continue to be the biggest and fastest-growing sector, up 85% year-on-year to $139.5 million and comprising nearly half of the online advertising market. Display advertising and classifieds saw increases of around 30% year-on-year and held a similar share of the remaining spend within the total sector.

These figures have been published by the Internet Advertising Bureau and mark the first report compiled by PricewaterhouseCoopers since they took over the contract from ABVS at the end of last year. Some of the data collection methods have changed and PWC do indicate that some figures could be conservative compared to previous reports. In addition, the Search and Directories spend sector continues to be an estimated figure, since Google doesn't disclose its figures, even though they are likely to account for 70%+ of this market.

Either way, the message is coming across strongly that there continues to be healthy growth in the online advertising sector and that this is likely to continue in the foreseeable future as more companies realise the benefits of this activity, particularly in search advertising.