SPENDING ON online advertising in Ireland rose by more than 12 per cent in the first half of 2010 to almost €54 million, driven by a rise in the number of internet users.

According to the latest study from the IAB Ireland, the trade association for the Irish online advertising industry, and PricewaterhouseCoopers (PwC), all online advertising formats attracted higher levels of advertising spending in the half-year to the end of June.

Paid-search advertising was one of the strongest performers, accounting for 45 per cent of total online expenditure in the first half of 2010, while 26 per cent was spent on online classified advertising.

“The double-digit growth in Irish online ad spend is a recognition by advertisers of the impressive return on investment delivered by online advertising formats,” said Suzanne McElligott, chief executive of IAB Ireland.

“Our market is now really embracing the digital opportunity,” she said.

The study found that the pick-up in online advertising was fuelled by a rise in the number of household broadband connections this year and an increase in internet usage, including a dramatic growth in social media usage.

Some 68 per cent of participants in the study said that they anticipate “growth”, or “strong growth”, in advertising spending in the next six months.

A total of 29 publishers participated in the study, many of whom represent multiple websites.

Other participants include sales houses and advertising networks.

A previous IAB/PwC study found that Ireland’s online advertising market was worth almost €100 million last year – 10 per cent of the overall advertising spend.

At €97.2 million, 2009 spending on online advertising overtook expenditure on outdoor, magazine and cinema advertising.