Internet Advertising Rebounds

Cory Kincaid
NEW YORK, New York – Internet advertising growth in 2003 showed a surprising uptick in activity, said a study from the Interactive Advertising Bureau (IAB).

The IAB Ad Revenue report, conducted in conjunction with PricewaterhouseCoopers, confirms what Internet industry analysts have been predicting for a while, that online advertising is finally beginning to rebound from the dot-com crash of 2000.

"Advertisers operate within an increasingly complex landscape, however, there is no denying that consumer Internet media usage continues to rise," said Tom Hyland of PricewaterhouseCoopers. "The Internet holds the promise of delivering the right audience at the right time - a winning combination for marketers of any type, and thus we should continue to see a favorable environment for increased Internet ad spending."

According to IAB, in the second quarter of 2003, consumer advertisers continued to spend most of their dollars online.

Internet advertising revenue in the U.S. tallied in at $3.29 billion for the first six months of the year, a 10.5 percent increase over the first half of 2002.

The growth upsurge was evident in the second quarter of this year, which totaled $1.66 billion in revenue, a 14 percent increase over the same period in 2002.

"Our prognosis for a continued and steady recovery is being realized and the outlook remains bright," said Greg Stuart, president and CEO of IAB. "With Internet usage and broadband adoption continuing to escalate, marketers are throwing their weight and dollars behind interactive advertising."

Among the leaders in the ad revenue upsurge are paid search services, which accounted for 31 percent of second quarter revenues, up from 9 percent, or nearly triple, from the same period in 2002.

Classified advertising tallied in at 18 percent, compared to 15 percent in the second quarter of 2002. Additionally, rich media doubled its share, increasing from 3 percent in the second quarter of 2002 to 6 percent in 2003, reflecting advertisers' recognition of faster broadband adoption.

Revenue digressions were indicated in the display advertising category, which was responsible for 22 percent of total revenues in the second quarter, down from 33 percent a year ago. Sponsorship revenues were also on the decline, taking a tumble from 24 percent of total revenues in 2002 to just 11 percent in 2003.

The IAB report was conducted by New Media Group of PricewaterhouseCoopers. IAB has been producing reports since 1996 and compiles its information from companies selling advertising on the Internet.

The statistical survey included data concerning online advertising revenue from websites, commercial online services, free email providers, and all other companies selling online advertising.