IAB: Ad Revenues Up 38 Percent in Q4

Internet ad revenue in the fourth quarter of 2003 hit $2.2 billion, a record-breaking 38 percent increase over the fourth quarter of 2002, according to estimates from PricewaterhouseCoopers (PwC).

The dramatic rise reflects the highest quarterly growth since PwC began tracking the numbers in tandem with the Interactive Advertising Bureau (IAB) in 1996. Revenues for the year were estimated at $7.2 billion, growing 20 percent over revenues for 2002, according to the report.

The previous record quarter for interactive advertising was the fourth quarter of 2000, with $2.12 billion in revenue, the IAB said. If the estimate bears out, the results would also mark the fifth consecutive quarter in which revenues have increased, based on the previous quarter’s report.

PwC estimated the fourth quarter and full year online ad revenue figures by compiling and aggregating 2003 Q4 data from the top 15 online ad sellers. Results were then extrapolated to calculate the total estimated industry revenue figure. The final full report on the fourth quarter of 2003 and full-year data will be released in April 2004, along with breakout details.

Citing “consistent revenue growth,” Tom Hyland, partner and chair of PwC’s New Media Group, said the online medium continues to demonstrate its vitality in a number of ways. “The growing health of the online medium and its proven advertising effectiveness bode well for sustainable revenue growth.”

The revenue increase reinforces other good news for the online sector, including UK interactive ad growth outdoing all other forms of advertising. The lion’s share of online advertising companies have reported turning profits in the fourth quarter of 2003, suggesting that rumors of recovery are far from premature.

The “Advertising Revenue Report,” launched by the IAB in 1996, incorporates data from all companies reporting “meaningful” online ad revenues. Types of companies surveyed include Web sites, commercial online services, free e-mail providers and other selling online advertising.

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