Online advertising revenue in Canada soared to an unprecedented $1.01 billion in 2006, according to a report by the Interactive Advertising Bureau of Canada, marking a 26% increase over its original estimate for the year and 80% above the $562 million that changed hands in 2005.

French Canada accounted for approximately 21%, or $208 million, of the market, up 68% over the 2005 tally of $124 million, according to figures released on Monday by IAB, a Toronto firm that represents advertisers and others in the ad market.

Broken down by medium, display ads, including banners, direct response and microsites made up 36% of the total revenues, followed by searches at 35%, classifieds/directories at 27% and e-mail advertising at 2%.

IAB Canada and its partners at Ernst & Young, which tabulated the results from the double-blind survey, credit the boost to ‘substantial revenue growth’ among publishers and online advertising networks, and to greater integration among ad campaigns, among other factors.

‘You get a sort of ‘perfect storm’ that was able to move the Canadian online advertising dial forward to such an extent,’ said Paula Gignac, president of IAB Canada, in a release.

IAB Canada projects that growth in 2007 will be 32%, reaching an estimated $1.3 billion. Online ad revenue could hit $2 billion in two or three more years, it says.

From Media in Canada