Major Industries Show 92% Increase in 1Q Ad Spending

Good news: a new report shows that Internet
advertising continued its sharp upward trend in the first quarter of 1998 with
the top 25 industries increasing spending 92% compared to the same period in

The InterWatch first quarter trend report was released by InterMedia
Advertising Solutions (IAS).

While computers and software (including online and Internet services)
continued to
account for nearly half of all Internet advertising (49.7% at $96.7 million),
its growth was less than average (75.7%), the report said. The largest growth
was seen in industries such as government and organizations (up 455%),
medicines (up 409%), local services and amusements (up 223.9%), direct
response companies (up 250.9%), retail (up 131.3%) and automotive (up 128.8%).

Over 400 industries were tracked, making the report “an accurate and detailed
picture of the dramatic growth in advertising activity on the Internet,” IAS
said. The study also tracks Internet spending as part of overall advertising

Among the approximate 300 Web sites tracked, the top 50 sites
accounted for over $181 million in revenue in the first quarter of 1998, a
growth of 101.4% over 1997.

In making the announcement, Joe Philport, president of IAS, said: “By
examining industry trends to this level of detail we are able to get a sense
of what industries are influencing the future of Internet advertising, and
just how big a role they are playing. We will make this trend analysis
available quarterly as a complement to our monthly InterWatch expenditure

For the first time the Internet claimed over one percent (1.3%) of overall ad
budgets, and the percentage is growing, the report said. Computers and
software are now at 14.6%, business and technology at 7.3%, direct response
companies at 2%, financial at 1.7% and surprisingly games, toys and
hobbycrafts and schools, camps and seminars are both at 1.6%.

Microsoft was the top spender on the Internet in the first quarter of 1998 at
$7.7 million, up only .1% over 1997. IBM, with a strong 147.8% increase, is
closing in fast in the second spot at $7.67 million. And Digital Equipment
jumped an astounding 478.8% to place third at $2.5 million.

Following computers and software, the financial industry represented 8.5% of
the ad dollars spent on the Internet at $16 million. Direct response companies
jumped to $11 million with 5.7% and media and advertising were a close fourth
at $10.6 million, with 5.5% of the total first quarter 1998 expenditures.

InterMedia Advertising Solutions was formed to monitor and provide detail on
advertising and expenditures on the Internet. The information is delivered
using the industry standards developed by IAS’ sister company, Competitive
Media Reporting (CMR). CMR provides strategic advertising intelligence to
advertising agencies, advertisers, broadcasters and publishers. CMR and IAS
are VNU Marketing Information Services companies.

For more information on the IAS InterWatch report, contact Michael Simoni at

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