Internet advertising broke the $1 billion mark in Canada for the first time in 2006, and is expected to grow by 32 per cent in 2007, the industry's association said Monday.

The Canadian online ad industry raked in $1.01 billion in 2006, an 80 per increase over the $562 million collected in 2005, according to the Internet Advertising Bureau of Canada.

The association forecasts that revenues in 2007 will rise to $1.337 billion, or 32 per cent more than the 2006 figure.

"It took us 13 years from when the first banner was served on the internet, until now, to reach the billion dollar mark in Canada," association president Paula Gignac said in a written statement. "It may take us only another two to three years to reach the second billion."

About 21 per cent or $208 million of the $1.01 billion spent in 2006 was spent on ads aimed at the French-Canadian market, an increase of 68 per cent of the $124 million spent in 2005.

The increase can be attributed to growth among online publishers, an increasing Canadian audience, more and new advertisers using online ads as part of integrated campaigns, ads linked to searches, and new types of ad formats such as video, according to IAB Canada.

The group also took some credit for the increases, noting that over the last two years, more than 1,000 executives representing advertisers, agencies and publishers have taken its internet marketing and advertising course.

By medium, spending in online classified sites and directories saw the biggest increase in revenue growth, rising 120 per cent to $273 million in 2006 from $124 in 2005.

E-mail advertising came in second place, increasing 82 per cent to $20 million in 2006 from $11 million the year before.

Advertising linked to search results rose 79 per cent to $353 million from $197 million in 2005.

And the oldest form of online marketing, display advertising, increased 58 per cent to $364 million from $230 million in 2005.