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Online advertising revenues will exceed $500 million in 2005, according to the annual revenue survey by the Interactive Advertising Bureau of Canada.

The survey estimates the year-end total for all forms of online advertising in Canada in 2005 will be $519 million, 43 per cent more than the $364 million in 2004.

Of the 2004 total, approximately $65.5 million, or 18 per cent, of ad dollars were allocated to the French Canadian market.

Display advertising continues to garner the largest portion of the online advertising pie, accounting for 45 per cent of total revenues. Search advertising grew to a 30 per cent share of all online advertising in 2004. Classified/directories/direct response and e-mail advertising totaled 25 per cent.

"Investment in the online channel is increasing at an explosive rate as advertisers and their agencies follow the movement of consumers," says IAB chair Brent Lowe-Bernie.

The IAB believes there is further room for growth beyond 2005.

"Recent research by Ipsos-Reid's shows that the Internet has eclipsed radio in popularity among all wired Canadians, and actually trumps TV in the 18-34 demographic. In the U.S., online's share is already at eight per cent, and growing steadily in response to similar media consumption shifts. Yet at the 2004 level of $364 million, online advertising still represents just four percent of the total ad dollars spent in Canada," says IAB director Paula Gignac.