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IAB: Internet Ad Revenues Reach $1.92 Billion for '98

The Internet Advertising Bureau said its figures show that ad revenues more than doubled in 1998, reaching an estimated $1.92 billion.

"It is easy for us to forget that the Internet, as a viable advertising medium, is barely four years old, and it is astounding that in such a relatively short period of time, its growth is now measured in billions of dollars," said IAB Chairman Rich LeFurgy.

The IAB said the 1998 Internet ad figure surpasses the estimated $1.58 billion spent last year on outdoor advertising. 1998 online advertising revenue grew by 112 percent from $906.5 million for 1997.

Fourth quarter 1998 revenues increased $165 million (34%) over the same quarter for 1997, to $655.6 million, the 12th consecutive record-setting quarter for the industry.

"It is significant to note that Internet advertising has not reached a plateau, and with online ad budgets increasing for current advertisers, and the growing number of large traditional advertisers who are migrating their advertising to the Internet, we look forward to a sustained period of growth in the years ahead," LeFurgy said.

According to the report, which is conducted independently by the New Media Group of PricewaterhouseCoopers for the IAB, leading ad categories during the fourth quarter were consumer-related (29%), computing (20%), financial services (19%), telecom (8%) and new media (7%).

Banner advertisements continue to be reported as the predominant type of advertising, accounting for 56%, with sponsorships (30%), interstitials (5%), e-mail (1%) and other (8%) rounding out the category. Reflecting the continuing growth of e-commerce, hybrid deals accounted for 54% of revenue transactions. with CPMs or impression-based deals at 40% and performance-based deals at 6% of revenues.

"Strong revenue growth led by consumer advertisers, and coupled with seasonality similar to traditional advertising, suggests the Internet is increasingly being factored into advertising budgets, and that the fundamentals are in place for continued industry growth," said Tom Hyland, Partner and New Media Group Chairman at PricewaterhouseCoopers.

The IAB report, which represents data from more than 200 companies representing over 1, 200 Web sites, includes online advertising revenue data from Web sites, commercial online services, free e-mail providers and other companies selling online advertising.