1Q Internet Ad Revenues Hit $693 Million, IAB Reports

Internet advertising revenues hit $693 million for the first quarter of 1999, nearly doubling the $351 million that was recorded in the same period a year ago, according to an industry report.

The Internet Advertising Bureau’s (IAB) Internet Ad Revenue Report shows that that consumer advertisers are leading the charge. The report is compiled independently by the New Media Group of PricewaterhouseCoopers for the IAB.

Banner advertisements continue as the predominant type of advertising, up slightly this quarter and accounting for 58 percent of ad expenditures, with sponsorships (29%), interstitials (6%), email (1%) trailing with all others at 6 percent.

When looking at pricing models, the report said, hybrid pricing accounted for 51 percent of 1999 first quarter revenues, with CPMs or impression-based deals at 43 percent and performance-based deals at 6 percent of revenues.

The categories which led online spending during the fourth quarter were consumer-related (27%), financial services (21%), computing (20%), retail/mail order (13%) and new media (8%).

“One of the things that makes the Internet a powerful and dynamic medium is the speed with which it can adapt and accept new business models that work. The emergence of hybrid pricing models combined with overall retail strength are an example of how e-commerce advertisers are beginning to add to overall online spending,” said IAB chairman Rich LeFurgy in a statement accompanying the report.

“Taking into account the traditional softness of the first quarter, a trend which for the past three years has seen it account for between 11 and 20 percent of annual growth, our industry is on a $3 billion plus (annual) run rate,” he said.

The report was started by the IAB in 1996, and represents data from more than 200 companies representing over 1,500 Web sites.