Report: E-Commerce Sparking Web Ad Growth

AdKnowledge, a provider of Web advertising management solutions, said that its 1998 online advertising statistics from more than 1,400 sites shows that the rise in e-commerce is fueling Web ad growth.

The Palo Alto, CA-based company’s second annual Online Advertising Report (OAR) Year In Review said that two of the fastest-growing categories of sites were classifieds and shopping/transactions. These two e-commerce-driven categories accounted for more than one third of the new sites established in 1998.

The study found growth in every site category with the number of sites seeking advertising increasing during 1998 from 1,033 in December 1997 to 1,424 in December 1998.

However, the report shows online advertising rates continued a downward trend. For the second year in a row, average CPMs were down 6 percent. The average CPM in December 1997 was $37.21, a number that declined to $35.13 by the end of 1998. However, two of the larger categories, computers/technology and shopping/transactions, actually increased their CPM rates in 1998.

“As one might have expected with all the pre-Christmas predictions of big e- commerce sales volume, advertisers flocked to the Web to attract shoppers,” said Kevin Wandryk, vice president of marketing at AdKnowledge. “Although Web advertising rates fell 6 percent for the second year, CPM rates also declined during the fourth quarter, historically the busiest advertising time of the year. We expect this downward trend to continue due to the ongoing rapid growth in the supply of online ad space.”

The report also showed that WebTV’s market share has tripled from .6 percent in December 1997 to 2.9 percent in December 1998. Additionally, when WebTV’s market share of 2.9 percent is combined with Microsoft Internet Explorer’s share of 47.8 percent, Microsoft now owns more than 50 percent of the browser market share, the report said.

AdKnowledge uses a data warehouse to supply information from its OAR report to interactive agencies and marketers to help them optimize their Web advertising campaigns. The report is a compilation of statistics gathered from the AdKnowledge System, which includes five components: planning; campaign buying and trafficking; ad serving and targeting; reporting; and analysis.

The full report is available here. (Requires Acrobat Reader.)