Ad Revenue Reaches Another Record

Internet advertising revenues for the third quarter of 1998 climbed to $491 million, an increase of 116 percent over the third quarter of 1997, according to the Ad Revenue Report by the New Media Group of PricewaterhouseCoopers for the Internet Advertising Bureau (IAB).

For the first time, Internet ad revenue exceeded $1 billion within the same calendar year, totaling $1.3 billion through the nine months that ended in September of 1998.

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According to the report, the categories that led online spending in the third quarter were consumer-related, computing, financial services, telecom, and new media (see table).

The report also found that the overwhelming number of revenue transactions (94 percent) continue to be cash-based. Barter/trade and packaged deals accounted for 5 percent and 1 percent of total revenues, respectively. Banner ads are still the predominant type of Internet advertising, accounting for 53 percent. Sponsorships (30 percent) and interstitials (6 percent) round out the category. Reflecting the growth of e-commerce, hybrid deals accounted for 52 percent of revenue transactions, with CPMs or impression-based deals at 43 percent, and performanced-based deals at 5 percent of revenues.

“This report is the biggest endorsement yet from the marketing and advertising communities that online advertising is here to stay as an integral component of their marketing and branding plans,” said IAB Chairman Rich LeFurgy. “The industry continues to grow and show strength as it does.”