Ancient history, at least as far as the Internet’s concerned: Marketers spent $7.3 billion on U.S. Web ads in the first three months of 2011. That’s a record for Q1, says the Interactive Advertising Bureau.

That number represents a 23 percent year-over-year increase. I’ve gotten used to adding caveats here, pointing out that these boosts are coming off a low base, but that’s no longer the case, either–2010 was pretty good for most of the Web ad business, too. Unless you’re talking about Yahoo or AOL, which have lagged the market.

And, as always, it’s worth remembering that these stats are largely a reflection of Google’s health, since the search giant represents a big chunk of the IAB’s totals.

[Image credit: Steve Jurvetson]

Indeed, people do seem to be separating their online professional identities from their personal identities more than they used to, now that the tools are available. Web users increasingly use LinkedIn to sign in to business-oriented sites, according to the social toolmaker Gigya.

LinkedIn started offering its credentials as a Web sign-on system early last year, and many business-oriented sites now offer users the option of authenticating using their LinkedIn account in addition to other options like their Twitter and Facebook accounts.

Gigya has seen a major increase in LinkedIn log-ins to sites it identifies as business-to-business. Twenty percent of social logins on such sites used LinkedIn credentials in January 2011, up from three percent in July 2010.

LinkedIn accounted for 26.6 percent of social sign-ons in January on the stock market news site Seeking Alpha, 20 percent on the Harvard Business Review and 14 percent on the Internet Advertising Bureau site. (The rest of social sign-ons were through Facebook and Twitter, mostly.)

To be sure, LinkedIn is still a minority share of social sign-ons on such sites, and these numbers don’t include users who register for a site without the help of a social network, or users who visit without registering.

Plus, the trend may be headed in the other direction. Many people propose that our personal and professional identities will increasingly merge, especially for younger generations. That’s the theory behind the legion of LinkedIn 2.0 start-ups like BranchOut and Assetmap.

LinkedIn is the first major U.S. social networking site to file for an IPO. It hopes to raise $175 million.

I don’t have a price for the deal, but from the outside, it looks a lot like the one we saw last month, when Specific Media picked up BBE: A big ad network that doesn’t do much with video buys its way into that business.

A reminder that while video ads are booming, they’re still relatively small: The Interactive Advertising Bureau says marketers spent $627 million on video in the first half of this year. That’s up 31 percent from 2009, but it’s still just 5 percent of the Web ad pie.

And while Google says that YouTube is getting ads on videos seen two billion times per week, there is plenty of room in the market for players most people have never heard of, like Tremor, YuMe and BrightRoll. But we will see more consolidation as the industry grows up a bit.

In 2008, Undertone raised a reported $40 million via a funding round supplied by JMI Equity. I believe that some of that money went back out the door to some managers and early investors. But at the time, Undertone said it would use the money for expansion, so that’s presumably where some of the Jambo money came from.

Search ads tend to be simple text links that pop up next to the results of a query. Display ads are larger, typically appearing on websites as banners, though sometimes spiced up with video or animation.

During a presentation during the IAB advertising conference, Google executives said the medium will become much more engaging. In past years, display ads were “static” and it was “tough to engage Madison Avenue’s most creative minds,” said Barry Salzman, a Google managing director for media. Now “display is bringing ‘sexy’ back.”

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The system is part of a broader push by Madison Avenue and the Internet industry to develop stricter self-regulation, in part to protect consumers’ privacy online. The self-regulatory push is aimed at warding off federal regulation of the $23 billion-a-year online-advertising industry.

“What we are really talking about here is trying to make the interactive advertising supply chain much more visible, more transparent to consumers, so that they have a much better ability to understand what is going on, and act on it,” says Randall Rothenberg, chief executive of the Interactive Advertising Bureau, a trade group of more than 460 media and technology companies, including Google Inc. (GOOG), Microsoft, Facebook and Yahoo. A coalition of trade groups, including the Council of Better Business Bureaus and Direct Marketing Association trade group, is leading the effort.

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Pick your data point:

The Interactive Advertising Bureau says U.S. spending on Web ads hit $5.9 billion in the first quarter of 2010. That’s a record for the first quarter of the year, but it’s a relatively modest 7.5 percent increase over a very crummy comparison in 2009.

And bear in mind that the IAB’s data include search spending, which means that the spike is in large part a reflection of Google’s (GOOG) health.

Want a bigger number? Try comScore, which says that the volume of display ads, i.e., the kind you might see on this page, shot up 15 percent in the last year. But while comScore (SCOR) says total spending on display ads hit $2.7 billion for the quarter and that the average CPM (cost per thousand impressions) hit $2.48, it isn’t reporting how those numbers compare to last year’s results.

ComScore spokesman Andrew Lipsman says his company isn’t putting out comparative numbers because it has changed its reporting methodology, so it doesn’t have apple-to-apples data. But he allowed that overall spending, and prices, have at least increased “modestly” in the last year.

So that’s not-bad news for display giants like Yahoo (YHOO) and AOL (AOL). And most definitely not for Facebook, which is now selling more ad impressions than any other Web publisher in the U.S.

Online ads bumped up 2.6 percent in the last quarter of 2009, according to the Interactive Advertising Bureau. That’s much less than anecdotal reports from some publishers would lead you to believe. On the other hand, Q4 was up 14 percent compared with Q3, so that gives you an idea of where things are going.

And this graph is particularly instructive. Note the sickening drops in the last two years, and the hopeful up-slope (click to enlarge):

Bear in mind that the IAB’s numbers are for all Web advertising. Which is to say, they’re in large part a reflection of Google’s (GOOG) performance, since search accounts for nearly half of the IAB total.

You can read the full report below, or check out a press release summary here.

IAB-Ad-Revenue-Full-Year-2009

Internet advertising increased a bit–1.7 percent, precisely–over the past three months. But that’s only when compared with the previous three months, according to the Interactive Advertising Bureau. Compared with the same period a year ago, Web ads are still down 5.4 percent, the trade group said (see chart below; click to enlarge).

Given that I work for a free, ad-supported Web site, I’m anything but an unbiased observer here, and I’d like to put a sunnier spin on things. But recall that the economy started its freefall well over a year ago, so comparisons to Q3 2008 should be particularly easy to beat. Even the boosterish IAB can only call the numbers a “hopeful sign” at best.

Still, if you’re looking for positive signs, you can take Google’s (GOOG) declaration that the worst is over, and I’ve heard plenty of anecdotal stories from small online players that spending is perking up again–though I’m also beginning to hear that some folks may have been overly optimistic about Q4. We’ll know soon.

Noting the new guidelines have created a “firestorm of controversy within the ad-supported interactive-media industry,” Interactive Advertising Bureau President Randall Rothenberg suggested the FTC rescind the new guidelines.

“These revisions are punitive to the online world and unfairly distinguish between the same speech, based on the medium in which it is delivered,” he wrote in an open letter to the FTC on Thursday. The online-advertising trade group suggested the FTC try a do-over, after opening up the issue for discussion with bloggers and online advertisers…

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Yahoo is set to unveil a major marketing campaign to reset advertiser and consumer perception of the long-troubled company during Advertising Week in New York, which starts a week from tomorrow.

According to numerous sources BoomTown has spoken to about the campaign, Yahoo (YHOO) is–at least with advertisers–going to focus on stressing the size and scale of the Internet giant.

The details of the plan will be made public Tuesday, Sept. 22, at a press conference.

It will take place immediately after a keynote speech–titled “Yahoo’s Consumer Revolution…Round II”–that the company’s new CMO, Elisa Steele, is set to deliver on the second day of the Interactive Advertising Bureau’s MIXX conference.

MIXX is a two-day event, run by IAB, focused specifically on online advertising.

Yahoo CEO Carol Bartz is also going to be attending Advertising Week–during which all the major players in the advertising business gather in Manhattan for a series of events–for a plethora of meetings with big Yahoo clients.

It is likely she and several other senior Yahoo execs will be at the press conference, sources said.

That press event will also include Penny Baldwin, a well-known industry exec Yahoo hired as its SVP of global integrated marketing and brand management in July.

The main message Bartz is set to deliver is that Yahoo is a powerhouse unlike any others on the Web when it comes to online display advertising.

And, in fact, Yahoo–despite all the internal and external turmoil it has undergone in recent years–remains one of the largest sites on the Internet, and is the top player in what is also called graphical advertising, as well as online media and communications.

“The whole push seems to be to remind people of vibrancy of the brand and exactly how huge its reach is,” said one person who has seen parts of the presentation. “It is less Yahoo is back than Yahoo has never left.”

Sources also noted that Yahoo is likely to stick to its plan to push the idea of “your home on the Web” to consumers, which I had previously posted about earlier this summer.

The idea of the Silicon Valley icon being the key hub destination for Internet users does dovetail with pushing its size to advertisers–major marketing messages that will also likely cost a pretty penny.

They will have to–Microsoft (MSFT) has been in the midst of a $100 million campaign for its new Bing search site and will likely spend more when it unveils updates to the service, dubbed Bing 2.0–within the next few weeks.

The company showed the changes it showed to its own employees last week, which was the subject of much tweeting on Twitter.

Yahoo will apparently give more specifics as to the spend for the marketing push at the press conference.

But, many sources said, the company is already out in the advertising market now, buying tens of millions of dollars in advertising online and offline to hawk Yahoo in print, on television and elsewhere.

(Full disclosure: Sources said that campaign will include The Wall Street Journal network, which includes this site.)

“It’s dramatic,” said one source about the marketing outlay.

Since she got to Yahoo, Bartz has continually stressed the need to promote Yahoo products and services more, including in an interview last week on CNBC (you can see that longish video here).

And, in the July earnings call for Yahoo, Bartz said: “In addition, we’re hard at work on plans to reposition our most valuable asset: Yahoo’s brand. Our Q3 plans include an initial wave of incremental marketing spend which will increase substantially into Q4 and next year.”

Also, in a Q&A in the same call, she added more about the long-term nature of the spending on branding:

“The branding and our whole campaign of advertising is just starting; however you have to understand that this is an ongoing campaign so it’s not transient at least for the next year or so. We’re really going to move to reposition the Yahoo brand and Yahoo Company, so right now, consider that as cost that’s in the system.”

What Bartz and other Yahoo execs will likely stress less is search, due to the search deal Yahoo struck in July with Microsoft in which the software giant will take over the back-end technology and Yahoo will sell search ads for both companies.

The company will compete with both Microsoft and Google (GOOG) in garnering the search market still, once the partnership is approved by regulators, with Yahoo focusing on differentiating itself via innovative user interface, design, features and functionality.

That’s one takeaway you can draw from a new study commissioned by an Internet publishing trade group, which concludes, astonishingly, that Internet publishing is an important and vibrant industry.

The data are being served up via the Interactive Advertising Bureau, which tells us the advertising-supported Web industry “directly employs more than 1.2 million Americans with above-average wages in jobs that did not exist two decades ago, and another 1.9 million people work to support those with directly Internet-related jobs.”

Note the “advertising-supported” modifier in the above paragraph, because that’s the real thrust of the IAB’s study/press release: The trade group is trying to get Congress and Washington to let members like Google (GOOG), Yahoo (YHOO) and Time Warner’s (TWX) AOL regulate themselves when it comes to hot-button issues like behavioral targeting.

Hence this quote from IAB boss Randall Rothenberg: “By understanding the total contribution of the Internet to the U.S. economy, we can more accurately assess the impact of potential legislative changes on the Internet’s operations, particularly the consequences of any actions that would alter ad-supported business models.”

OK. Fine. But regulation is tomorrow’s problem. Today, let us celebrate the fact that some of us have jobs! And also, according to the IAB, we’re providing the following:

• Universal access to an almost unlimited source of information
• Increased productivity (output per unit of capital or labor, or increased consumer utility at a lower cost)
• Innovation in business practices, consumer behavior, commerce and media
• Empowerment of entrepreneurs to start small businesses, find customers and grow
• Environmental benefits derived from saving natural resources lowering pollution through the reduced use of petroleum-based fuels and paper

Cool, right? And all this time I thought I was just blogging. You’re welcome! And please keep reading.

[Image credit: respres]

The opportunity: The Interactive Advertising Bureau’s numbers for the fourth quarter of 2008–remember all the way back then? If you do, then you won’t be shocked to see that Web advertising slowed way, way down during the last three months of the year. And it did much worse than that at some shops, like Time Warner’s (TWX) AOL.

If you’re a professional optimist, like the IAB’s Randall Rothenberg*, you’ll note that ad dollars are still moving from offline venues to the Web, which makes sense, because that’s where people’s eyeballs have moved. For the year, Web ads grew 10.6 percent, while the overall ad market contracted by 2.6 percent.

But the sourpusses among us will note that Web ads ground to a halt at the end of the year. The IAB says U.S. Web ads grew a mere 2.6 percent during Q4, to $6.1 billion. The year before, they had grown at a 24 percent clip.

Here’s a sector-by-sector breakdown of last year’s market. No surprise: The lion’s share of the business goes to Google (GOOG), as it does every year. (Click to enlarge).

Side note: The video ad market, which was supposed to be a geyser, still has yet to be unleashed, despite the best efforts of YouTube, Hulu, et al. Advertisers spent just $734 million on digital video–about three percent of the market. Positive spin: That’s more than twice the amount they spent in 2007.

* Prior to his career as a professional optimist, Randall used to do excellent work reporting on the ad business. Highly recommended: “Where Suckers Moon,” his 1994 book that went behind the scenes during the creation of a Subaru campaign. Great stuff.

Everyone who wondered why Randy Falco and Ron Grant were still running AOL gets an answer: Time Warner (TWX) was lining up their replacement.

Google (GOOG) sales chief Tim Armstrong becomes chairman and CEO of the troubled Web property, effective immediately.

The move is getting immediate cheers from current and former AOL employees I’ve talked to. The snap consensus is that anyone would have been better than Falco, a longtime NBC executive, and Grant, who was Time Warner CEO Jeff Bewkes’s chief lieutenant before being elevated to his role as President and COO of AOL.

But they’re particularly happy to see a sales guy running the organization: AOL once had a much admired sales operation. But in recent years, the group has been roiled, as a series of sales chiefs came and went. (From Kara Swisher, here are more details on the shakeup, and an interview with Armstrong. And here’s some early betting on Armstrong’s replacement at Google — former Doubleclick CEO David Rosenblatt has a lot of fans).

The current AOL sales chief, former Yahoo (YHOO) sales boss Greg Coleman, was installed just last month. He’s been deep into a reorg of his own.

It was desperately needed after AOL’s miserable performance in 2008, which concluded with a quarter that saw ad revenue drop 18 percent. But those plans may be up in the air now.

In any case, here is the full press release from Time Warner about the firing of Falco and Grant, after the jump:

NEW YORK, March 12, 2009–Tim Armstrong, Google Senior Vice President, has been named Chairman and CEO of AOL, LLC, Time Warner Inc. (NYSE:TWX) Chairman and CEO Jeff Bewkes announced today. Current AOL Chairman and CEO Randy Falco and President and COO Ron Grant plan to leave the company after a transition period.

In making the announcement Mr. Bewkes said: “Tim is the right executive to move AOL into the next phase of its evolution. At Google, Armstrong helped build one of the most successful media teams in the history of the Internet–helping to make Google the most popular online search advertising platform in the world for direct and brand marketers. He’s an advertising pioneer with a stellar reputation and proven track record. We are privileged to have him preside over AOL as its audience and programming businesses continue to grow and its advertising platform expands globally. He’ll also be helpful in helping Time Warner determine the optimal structure for AOL.”

Tim Armstrong said: “I’m very excited about the opportunities presented in leading AOL. AOL has a wide-ranging set of assets and audience. The company is well positioned to enhance those assets into a larger share of the Internet audience and advertiser communities. AOL and Google have been partners for years and I look forward to collaborating with Jeff Bewkes and his team as we explore the right structure and future for AOL.”

Mr. Bewkes added: “Randy led AOL in its transition from a subscription business to an audience business. Under Randy and Ron, AOL’s programming sites exhibited year-over-year growth in unique visitors for 23 consecutive months with many of its sites now in the top five of their categories. They also assembled Platform-A, the number one display ad network in the U.S. with a reach of more than 90%. They also aggressively cut costs as they restructured the Audience business portion of the company into three distinct operating units: People Networks, MediaGlow, and Platform-A. As Randy and Ron move on, they leave AOL with our gratitude and appreciation for remaking the company and bringing it to a new and promising level.”

Tim Armstrong was a member of Google’s Operating Committee and served as the president of the Americas Operations. Under the Americas Operations, Armstrong’s team managed publishers and advertisers’ relationships and platforms with some of the world’s most widely recognized media and agency brands.  Armstrong started at Google in the year 2000 and opened the first office outside of the Mountain View, CA headquarters.

Mr. Armstrong joined Google from Snowball.com, where he was vice president of sales and strategic partnerships. Prior to his role at Snowball.com, he served as director of integrated sales & marketing at Starwave’s and Disney’s ABC/ESPN Internet Ventures, working across the companies’ Internet, TV, radio, and print properties. He started his career by co-founding and running a newspaper based in Boston, MA, before joining IDG to launch their first consumer Internet magazine, I-Way.

Mr. Armstrong sits on the boards of the Interactive Advertising Bureau (IAB), the Advertising Council, and the Advertising Research Foundation, and is a trustee at Connecticut College and Lawrence Academy. He is a member of Mayor Bloomberg’s MediaNYC 2020 committee.  He is a graduate of Connecticut College, with a double major in economics and sociology.

That’s not what the release from the Interactive Advertising Bureau and Pricewaterhouse says, of course. It notes, instead, that the industry notched 11 percent year-over-year U.S. revenue growth in the third quarter of this year, and two percent growth compared to last quarter, which it says indicates a “stabilized” market.

But when the trade group for an industry known for go-go growth says things have “stabilized,” you know things are grim. Here’s what “stabilized” growth looks like in graphic form (click to enlarge):

But here’s the really disturbing thought for everyone who depends on Web ad revenue, or the promise of Web ad revenue (and yes, I’m talking about my employer as well): What would that chart look like without the contributions of Google, which grew 31 percent in the last quarter (and two percent compared to the previous quarter)?

By the IAB’s own count, search revenue makes up a little less than half of its total (44 percent in Q2), and Google (GOOG), of course, accounts for the majority of that market. You do the math. Or better yet, spend that time figuring out how to stay afloat for the next year.