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Online Ad Revenues Hit $4.6 Billion in 1999

By Damon Marturion
New Business News Staff Writer

RYE - 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 (IAB) 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 Bureau.

"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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