IAB: Online Ad Revenues Hit $4.6 Billion in 1999

In perhaps its first year as a true medium of the masses, Internet
advertising expenditures climbed to $4.62 billion, growing 141 percent over
the $1.92 billion reported for 1998, according to the Internet Advertising Bureau‘s Internet
Ad Revenue Report.

The report, conducted by PricewaterhouseCoopers, is
compiled from data supplied by companies selling advertising on the
Internet. Skeptics believe surveys like this may return skewed results,
since the companies selling advertising have an interest in the perception
of growth in the industry.

The report showed that fourth quarter advertising revenue grew to $1.7
billion, a 161 percent increase over the same quarter in 1998.

“Growth measured in billions of dollars is certainly terrific news for the
Internet economy,” said Rich LeFurgy, chairman of the Internet Advertising

“No longer are advertisers and marketers asking why they should advertise
online, they are now asking how big a part of their budgets they should
devote to online exposure.”

Categories leading online spending during the fourth quarter were
consumer-related (31 percent), financial services (17 percent), computing
(16 percent), new media (12 percent) and business services (7 percent).

Most of the transactions — 94 percent, in fact — were conducted on a cash
basis in the fourth quarter. Barter, trade, and packaged deals accounted
for five percent.

The study also found that banner ads dominated, accounting for 53 percent
of ads sold in Q4. Sponsorships were next, at 25 percent, followed by
interstitials at four percent, e-mail at three percent.

Hybrid deals accounted for 52 percent of revenue transactions for Q4. CPM
deals made up 40 percent of deals, and performance-based deals were 8
percent of revenues for the fourth quarter.

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