Avenue A/Razorfish: 2007 Billings Up 36%

Web advertising had a pretty good year in 2007, but it was even better for Avenue A/Razorfish, the digital ad agency now owned by Microsoft. Avenue A says it billed $775 million last year, a 36% increase. That outpaced digital ad spending in general -- IDC estimates that online ads grew 27% last year.

The agency, swallowed by MSFT as part of its $6 billion deal for aQuantive last year, breaks out some of its year-end numbers in its fourth-annual "Digital Outlook Report". At least some of the report reads as a proxy for the rest of the online ad business business: Spending on traditional portals slipped from 24% in 2006 to 19% in 2007, while spending on verticals (entertainment, health, sports, etc) grew from 37% to 39%. Search spending grew from 28% to 31% of digital spending, in part due to rate increases at Microsoft's AdCenter and Yahoo's Panama.

The agency said it placed ads on 1,832 sites last year, up from 863 sites in 2006, reflecting the growing importance of ad networks which cobble together inventory from around the Web. Spending was heavily concentrated among the top-five networks, which accounted for 71% of the agency's ad network billings: ValueClick, DrivePM, AdSense, Tribal Fusion, and Advertising.com.

Avenue A Razorfish 2007 billings by category:

Vertical Networks: 39%
Search: 31%
Portals: 19%
Ad Networks: 11%