First Quarter Online Ad Revenues Reach $2.8 billion

Online ad revenues for the first quarter of this year reached an estimated $2.8 billion, up 26 percent over Q1 2004 and up 4.3 percent over the fourth quarter of last year. That’s according to the latest report from the Interactive Advertising Bureau and PricewaterhouseCoopers.

The quarter continues the momentum of last year’s growth, when the IAB and PwC reported a 33 percent increase from the previous year.

The researchers attributed the continued growth to advertisers’ continuing to follow consumers as they shift their media consumption online. Pete Petrusky, director of new media at PricewaterhouseCoopers, said the Internet accounts for 15 percent of all media consumption, but currently only accounts for 4 to 5 percent of advertising volume.

“I think rich media is going to be one of the key growth stories in 2005,” said Petrusky. “I do believe more traditional brand advertisers are coming to the Web because the media offers more compelling offerings than in the past to deliver rich media and brand building.”

The report tracks online ad expenditures from all companies selling online advertising, including Web sites, commercial online services, and free email providers.