'97 Web Ad Revenue Estimated at $597 Million
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Larger budgets and an expanding advertiser base helped boost Web advertising revenue to an estimated $597.1 million in 1997, up 152.6% over $236.4 million in 1996, says an industry survey.
Quarter to quarter Web ad revenue growth over the past year ranged from 23.6% to 58.7% with an estimated $84.0 million in the first quarter, $133.3 million in the second quarter, $169.8 million in the third quarter and $210.0 million in the fourth quarter.
The figures are from Stamford, CT-based Cowles/Simba Information Inc.'s Electronic Advertising & Marketplace Report (EAMR) newsletter.
"Growth was driven by several factors, including bigger ad budgets for existing Web advertisers; the market entry of new advertisers; the increasing influence of rep networks, giving exposure to both advertisers and Web sites; and a continuing sense of peer pressure among advertisers that are afraid of falling behind their competitors," said Matt Kinsman, editor of the newsletter.
Yahoo! was the top ad-supported site for the second year in a row at $53.2 million, up 180.0% from $19.0 million in 1996 according to EAMR estimates. Second-ranking Excite narrowed the gap with Yahoo! largely as a result of its acquisition of WebCrawler from America Online last year. Excite generated an estimated $40.2 million in ad revenue last year, up 171.6% from $14.8 million in 1996.
Despite the good news, "There are still a number of factors that cast a shadow over the actual health of the market," Kinsman said. "A handful of sites continue to dominate the market and those same sites are dependent on a handful of the same advertisers month-to-month. Larger sites such as Yahoo! and ZDNet are beginning to report profits, but the majority of profitable ad- supported Web sites are small companies that have been successful due to low startup costs rather than tremendous performance."
The newsletter tracks Web ad revenue on a monthly basis, surveying leading ad-supported sites and projecting an industry total based on the percentage of revenue these sites represent.