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Internet advertising revenues in the U.S. hit $7.3 billion for the first quarter of 2011, a 23 percent increase over the same period in 2010, according to figures released today by the Interactive Advertising Bureau and PricewaterhouseCoopers. This is the highest first-quarter revenue level ever for the industry.

Considering the pretty woeful hit rate of most Internet advertising, that may seem surprising, but as traditional ad destinations like broadcast TV and print publications continue to lose ground, advertisers probably don’t have many options. The technology continues to improve, however.

Google’s AdMob advertising network recently announced new formats for tablet advertising, mobile advertising for small businesses and improved in-app advertising. AdMob is receiving 3.5 times as many ad requests as it did a year ago.

Startup LocalResponse has introduced check-in advertising. The company aggregates check-ins and mentions of merchants across multiple social networks including Facebook, Twitter, Gowalla and Foursquare. Merchants can view the check-ins and develop a response, such as a coupon, which is sent via Twitter to the check-in customer. The company claims a 60 percent click-through rate, which is spectacular in comparison to the click through rate of most online advertising.

Google Chairman Eric Schmidt, a man who should know a thing or two about advertising, made a personal investment in Eyeview, which allows online video advertisers to show personalized ads based on location, demographic, time, weather and browsing history.

While this is all interesting technology, I can’t help thinking of former Facebook data guru Jeff Hammerbacher’s comment in BusinessWeek: “The best minds of my generation are thinking about how to make people click ads. That sucks.” he said.

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