CPMs Soften, E-Commerce Fuels Online Ad Growth

Average CPM rates slipped four percent in 1999, yet the number of sites seeking to advertise grew 135 percent last year, probably due to the booming e-commerce business, according to Online Advertising Report data released by Engage Technologies‘ AdKnowledge.

The report, compiled from statistics on more than 3,000 Web sites, looks at key indicators of the health of the online advertising industry. AdKnowledge has been gathering and reporting this information for more than three years.

The data show that, although average CPM rates for online advertising fell in 1999, they didn’t fall as much as in 1998, when average rates declined six percent. Since 1997, when AdKnowledge started collecting these statistics, average CPMs have dipped nine percent. The average CPM rate in the fourth quarter of 1999 was $33.75, according to the report.

Still, the industry is showing tremendous growth, due to the number of sites seeking to buy advertising. At the end of 1999, 3347 sites were seeking advertising, which was 135 percent more than at the end of 1998. The figures showed a whopping 306 percent growth since the beginning of 1997.

Newer formats and sizes of advertising continue to grow, as well. Java and HTML ads are the most widely used, but audio and video ads grew by 40 percent and 52 percent, respectively. Other rich media formats like Emblaze by Geo and Active Ads by Thinking Media each saw the number of sites accepting them double in 1999.

Smaller ad sizes are also growing in acceptance. The number of sites accepting 88 x 31 pixel ads grew by 116 percent and 120 x 60 pixel ads grew by 77 percent. Still, the 468 x 60 pixel ads remained the most widely accepted banner size in 1999.