AP, LTW

Internet ad sales are on the mend as first-quarter revenue rose 7 percent, marking the second straight quarter of increase, according to the

The revenue of $5.9 billion marks the highest for a first quarter, which is typically a slower period following high ad spending over the holidays.

Thursday’s study by the IAB and PricewaterhouseCoopers says retailers are spending more on Internet ads as Americans go back shopping. Retailers accounted for 20 percent of all online marketing in 2009.

“The year-over-year growth we are seeing reflects marketers’ confidence in the value and effectiveness of interactive advertising,” said Randall Rothenberg, IAB’s chief executive officer.

“The Internet, together with explosive technological innovation in devices and platforms, has transformed consumers’ lives, giving them access to entertainment and information however, whenever, and wherever they want it,” he added. “That’s why the vibrant interactive advertising and marketing industry lends major fuel to the U.S. economy.”

The rebound came after online ad revenue slumped for the first three quarters of 2009.

David Silverman of PricewaterhouseCoopers said that while uncertainty about the economy remains, the strong start in 2010 "is a sign of the health and vitality of online media."

“We are seeing continued signs of an improved economy and interactive advertising market," Silverman added in a statement. “The media industry —like the economy as a whole—saw tremendous challenges this past year, and uncertainty about the recovery remains. However, entering 2010 with such strong Q1 revenues is a sign of the health and vitality of online media, and of marketers’ continuing investment in interactive as a cornerstone of their advertising campaigns.”

Online market research firm eMarketer says the trend is set to continue.

On Thursday, eMarketer revised its forecast for 2010 to reflect faster growth. It now predicts online ad revenue will reach $25.1 billion this year, up 10.8 percent from 2009. The previous forecast, made in December, had revenue growing by just 5.5 percent to $23.6 billion.

EMarketer’s revision, however, reflected its belief that the economy will remain soft. The firm said that would prompt advertisers to push more of their limited marketing dollars online, because they would have greater ability there than with traditional media to measure the effectiveness of their ad campaigns.

In 2009, the height of the economic crisis, online advertising fell for the first time in seven years. Revenue dropped 3.4 percent that year to $22.7 billion.

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