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Rapid Growth in Internet Advertising
Internet advertising bucked the industry trend in 2003 and showed strong revenue growth of 21%, according to a new report by the Interactive Advertising Bureau (IAB) and the New Media Group of PricewaterhouseCoopers (PwC).
The Internet Ad Revenue Report includes final figures for Q3, Q4 and full-year 2003. Overall industry revenues rose nearly twenty-one percent to just under $7.3 billion. Revenue in Q4 2003 was a record-setting $2.2 billion and Q3 $1.8 billion, slightly higher than previously estimated.
'In light of a seeming malaise in the advertising industry at large, we are gratified that the dynamism that our industry continues to demonstrate is clearly not being lost on marketers and advertising agencies', said Greg Stuart, President & CEO, IAB.
'We look for the continued evolution of new and effective ad formats to aid in the growth of the sector, as marketers recognize the unique opportunities that are offered in the medium', noted Thomas E. Hyland, Chair PricewaterhouseCoopers New Media Group.
The report breaks revenues down by several sets of criteria, as follows.
Ad Formats - exceptional growth for keyword search and strong performance for rich media and classified stand out. Display ad revenue was fairly constant 2002-3 and sponsorship declined [NB this reflects our own experience for display ads but they have boomed so far in 2004, as has sponsorship - Ed].
| |
2002 |
2003 |
| Display
Ads (Banners) |
29% |
21% |
| Sponsorship |
18% |
10% |
| Classified |
15% |
17% |
| Slotting
Fees |
8% |
3% |
| Keyword
Search |
15% |
35% |
| Interstitial
|
5% |
2% |
| E-Mail
|
4% |
3% |
| Rich
Media |
5% |
8% |
| Referrals |
1% |
1% |
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Sectors -defined as 'Ad Categories' in the report - consumer advertisers continued to lead the way and grew their share past the one third mark. The top five are:
| |
2002 |
2003 |
| Consumer |
32% |
37% |
| Computing
|
18% |
20% |
| Financial
Services |
13% |
12% |
| Media
|
12% |
11% |
| Business
Services |
7% |
10% |
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Pricing Models - performance-based deals are on the up:
| |
2002 |
2003 |
| Hybrid
|
34% |
20% |
| CPM
/ Impression
|
45% |
43% |
| Performance
based |
21% |
37% |
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Data for the report, which began in 1996 when the IAB was founded, comes from 'all companies that report meaningful online advertising revenues', and includes data for online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising.
The IAB represents companies that are actively engaged in, and support the sale of interactive advertising. Members sell over 85% of online advertising in the US, and include AOL, CNET Networks, DoubleClick, MSN, Google, Overture, The Walt Disney Internet Group, Yahoo! and over 150 others. Web site at www.iab.net
A copy of the full report is available for download at http://iab.net/resources/ad_revenue.asp
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