Survey: Internet Ad Revenues Climbing in Canada

Online advertising in Canada is soaring, according to the Ernst & Young
Internet Advertising Survey. Findings indicate that 1998 first-half revenues
equal (CAN)$8 million, while revenue for all of 1998 is projected at (CAN)$20.7 million.

The survey predicts that industry revenues in 1999 will increase by 82%, to
(CAN)$37.7 million.

“Revenues will continue to build as media buyers become more comfortable with
using the Internet as a complementary advertising vehicle alongside the more
traditional advertising approaches,” said Miles Faulkner, partner, Ernst &
Young Management Consultants’ NetCommerce Solutions team.

The new estimates come from the second of the semiannual surveys that Ernst &
Young conducts on Internet advertising for the Internet Advertising Bureau of
Canada. This report includes first- and second-quarter results for 1998 along
with forecasts for the balance of 1998 and 1999.

The study presents evidence that the Internet is maturing and gaining
acceptance by advertising agencies. In 1998, advertising agencies were the
source of $12 million of Canadian Internet advertising revenues. This
represents 58% of total 1998 advertising revenues, compared to 44% in the 1997
Year-End Survey.

First-half results for 1998 show banner advertising as the top Internet
advertising product in Canada at $53 million.

“The surge in the share of
banners can be explained primarily by the increased acceptance that banners
are the best way to create brand awareness on the Internet,” said Faulkner.
“This rise in share is also an indication of the standardization of banners as
an Internet advertising product.”

“The survey results are completely in line with our initial estimates,” said
Rocco Rossi, co-chair, IAB Canada research committee and vice president for
new media, The Toronto Star. “Surging Internet advertising revenues
demonstrate that the Web is becoming an increasingly important channel for
buying and selling–good news for Canadian companies integrating Web
strategies into their overall business and marketing plans.”

The findings came from a survey of the 73 Web operations believed to generate
the majority of Internet advertising revenue in Canada.