Internet advertising revenues in the U.S. reached a record $23 billion last year, according to the 2008 Internet Advertising Revenue Report, released today by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP.

Interactive advertising continued to grow, despite downward trends in the overall economy. IAB attributes this to “marketers’ increased recognition of the medium’s value in reaching consumers online,” where consumers are spending more of their time.

2008 revenues hit a record $23.4 billion, a 10.6% increase over 2007. By comparison, other sources indicate weakened advertising spending across all media. The Nielsen Company, for example, reported that U.S. advertising for 2008 was down 2.6%, compared to 2007.

This is the fifth consecutive year of record results for Internet advertising revenues.

According to the IAB report, online search remains the main driver of revenue growth, showing a whopping 19.8% increase over 2007. Digital video, though still a small overall contributor, more than doubled its revenue with an increase to $734 million from $324 million in 2007. IAB concludes that this demonstrates “how both marketers and consumers are embracing this dynamic platform.”

As in 2007, retail, financial services, computing and automotive remained the four largest verticals among Internet advertisers in 2008. Consumer packaged goods, an industry vertical historically slow to embrace interactive advertising, notably increased its share of total Internet ad revenues by 60 percent over 2007. The Internet is now the third largest ad-supported medium, marking its increasing significance to marketers and consumers.

“Though some categories in the fourth quarter slowed or even dipped, reflecting the current economic challenges, the overall performance is up, confirming interactive’s ever-growing importance to the successful marketing mix,” said David Silverman, Partner, Assurance, PricewaterhouseCoopers.

The report in its entirety can be viewed at http://www.iab.net/AdRevenueReport.