Ad Revenues up 7% in Q1 2003

Figures from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) show that Internet advertising revenues were up by 7 percent to $1.7 billion in the first three months of 2003, the second straight quarterly increase in two years.

Details about key drivers are expected in September 2003 when the IAB has more complete data. But the early results suggest a continuation of current trends that helped boost the second half of 2002, namely the hot paid search market and the growth of rich media.

For now, at least, top line numbers the IAB has collected show two straight quarters of rising online ad sales in a two year period. The first quarter’s $1.692 billion in revenue was up by 7 percent from the fourth quarter of 2002, and up by 11 percent compared with the first quarter of last year, the IAB said.

The bureau said the first quarter figures in the Internet Ad Revenue Report, which was conducted for the IAB by Price WaterhouseCoopers, were estimated by surveying and compiling 2003 first-quarter data from the top 15 online ad sellers. They were then extrapolated to calculate the total industry revenue figure.

“Advertisers follow the timeless creed of go where your consumers are, and the interactive advertising market is no exception,” said Greg Stuart, president and CEO of the IAB, in a statement. “Consumers are going online in droves and the ad dollars are following closely behind.”

Tom Hyland, a partner with PricewaterhouseCoopers and chair of the accounting firm’s new media group, said the early results show that the future for interactive advertising appears to be on strong footing and poised for gradual and sustained growth.

“Many of the factors contributing to last quarter’s up-tick seem to have held momentum, including improved data for advertisers to analyze as they have now been engaged in the market for a longer period of time,” he said.

The survey collected data about online advertising from Web sites, commercial online services, free email providers, and all other companies selling online advertising. The IAB said the first and third quarter revenue reports are estimates, with the actual figures being released along with second and fourth quarter data.