IAB: Ad Revenues Up 5 Percent in Q3

Internet ad revenue in the third quarter of 2003 came in at $1.75 billion, a 5 percent increase over the second quarter and a 20 percent rise over the same period a year ago, according to estimates from PricewaterhouseCoopers (PwC).

The latest PwC quarterly report, sponsored by the Interactive Advertising Bureau (IAB), found the numbers mark the highest total revenues reported since Q3 2001 ($1.77 billion). If the estimates bear out, the results would also mark the fourth consecutive quarter in which revenues have increased.

PwC estimated the third quarter revenue figure by surveying and aggregating 2003 3Q data from the top 15 online ad sellers. Results were then extrapolated to calculate the total estimated industry revenue figure. Actual third quarter results will be reported in early 2004, along with fourth quarter revenues.

“We believe the fundamentals of interactive advertising will further drive industry revenues higher. The 5 percent quarter-over-quarter growth further demonstrates that the basic foundations of interactive advertising are built on a solid business model,” said Tom Hyland, partner and chair of PwC’s New Media Group.

The revenue increase suggests a continuation of the online ad sector’s good tidings in a year that has seen burgeoning spending in the paid search and rich media categories.

“A 20 percent year-over-year growth increase speaks for itself. Clearly, the Internet is proving itself a fertile marketplace attracting advertisers and marketers across the board,” said IAB president and CEO Greg Stuart.

The IAB started the “Advertising Revenue Report” in 1996. It 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 others selling online advertising. First and third quarter revenue reports are estimates, with the actual figures being released along with the next quarter’s data.