Quarterly Internet Advertising Revenues Hit US$2 Billion 21/08/00 According to the Internet Ad Revenue Report from the Internet Advertising Bureau (IAB), online advertising revenues are fast approaching the two billion dollar per quarter mark as revenues for the first quarter of 2000 reached US$1.953 billion. The report, conducted independently by PricewaterhouseCoopers also found that revenues for the first quarter grew 9.9% over the fourth quarter of 1999, and 182% over the comparative first quarter of 1999. In compiling the quarterly report, PricewaterhouseCoopers has expanded the categorisation of the types of ads being used, reflecting the significant growth in creativity and formats which advertisers are using in their online messaging. In addition to monitoring banners, sponsorships and email, the report will now also track classifieds, referrals, rich media and keyword searches. According to Rich LeFurgy, Chairman of the IAB, "We have become accustomed to the continued sustained growth of online ad revenues and the report for the first quarter of 2000 continues that very positive trend. What is of prime importance is that we have even greater growth than we had last year with even larger numbers. While the market correction and subsequent dot.com closures likely had some impact in slowing growth in the second quarter, (revenues that are being compiled now by PricewaterhouseCoopers,) the continued and growing numbers of large traditional advertisers expanding their budgets for Internet campaigns are really the news here. Time will tell what effect, if any, recent developments will have on the growth of online advertising, but the combined brand building, targeting, one-to-one marketing and e-commerce capabilities of the Internet will continue to fuel revenue growth throughout the year." According to the report, the categories which led online spending during the first quarter were consumer-related (31%), financial services (15%), computing (15%), new media (12%) and business services (10%). The report also found that the overwhelming number of revenue transactions, (94 %) continue to be cash-based with barter/trade and packaged deals accounting for 5% and 1% of total revenues respectively. "An indication of the health of the online advertising industry is that there are no major surprises here," commented Tom Hyland, Chair, PricewaterhouseCoopers New Media Group. "In fact, the higher rate of growth on a higher base, while not totally unexpected, points to the robustness of the medium as it matures. With no major upheavals for the first quarter of 2000, growth has remained steady and consistent across all of the areas we track. An additional healthy sign of the industry's maturation is the growth of ad types, allowing us to reflect the growing use of classifieds, referrals, rich media and keyword searches." Conducted by the New Media Group of PricewaterhouseCoopers on an ongoing basis, with results released quarterly, the "Advertising Revenue Report" was started by the IAB in 1996, and represents data from more than 200 companies representing thousands of sites. The results reported are the most accurate measurement of online advertising revenues since the data is compiled directly from information supplied by companies selling advertising on the Internet. The survey includes data concerning online advertising revenues from websites, commercial online services, free e-mail providers, and all other companies selling online advertising.