Source: IAB

Internet advertising is not growing as fast as it once did, but it is still outpacing some of the more traditional advertising channels like newspapers and television. Advertisers spent $23.4 billion online last year, up 10.6 percent over 2007, according to the 2008 year-end report from the Interactive Advertising Bureau. [PDF-19 pages] That compares to the entire advertising sector, which Nielsen said was down 2.6 percent last year.

Meanwhile, the battered newspaper industry saw its print advertising drop by 17.7 and online advertising revenue dip by 1.8 percent last year, according to a report by TechCrunch based on numbers from the Newspaper Association of America.

“We are seeing an ongoing secular shift from traditional to online media as marketers recognize that ad dollars invested in interactive media are effective at influencing consumers and delivering measurable results,” said IAB president and CEO Randall Rothenberg in a release.

Online advertising has a big impact on a number of Seattle area companies, from powerhouses like Microsoft to small startup companies.

Search advertising held the biggest share of the $6.1 billion invested during the fourth quarter, accounting for 46 percent. That was followed by banners ads (21 percent) and classifieds (13 percent). Here's a more in-depth breakdown from the IAB: