ADVERTISING
Internet advertising perks up
12-06-2003
by Andrew McLindon
On-line advertising revenue in the US in 2002 was down year-on-year, but showed sequential growth in the final quarter of last year.
The Interactive Advertising Bureau (IAB) said on Thursday that American Internet advertising revenue stood at USD6 billion for 2002, which was a fall of 16 percent from 2001.
However, the USD1.6 billion in revenue achieved in the fourth quarter of 2002 was up 9 percent from the quarter before and beat a previous USD1.5 billion estimate for Q4. This was the first quarter-on-quarter growth in the sector since the fourth quarter of 2000.
The IAB said it was "very encouraged" by the revenue results in the second half of 2002. It claimed that they showed the industry was poised to experience "incremental and sustained growth over the next few years."
Pete Petrusky, director of new media at PricewaterhouseCoopers, which produced the revenue results, said there were a number of factors behind the turnaround in Internet advertising. This included a modest rebound in overall advertising spend and the growth in high-speed Internet adoption, which was allowing advertisers to experiment with new and more creative ad formats.
In terms of formats, the PwC study found that keyword searches experienced the biggest growth in revenue during 2002. Such searches represented 15 percent of ad revenues in 2002, up from 4 percent in 2001. In the fourth quarter, they accounted for 21 percent of total ad format revenue.
The biggest revenues generating formats in 2002 were banners (29 percent of the total) and sponsorships (18 percent). However, both suffered falls in 2002, 7 percent and 8 percent respectively. IAB put this down to the termination of several long-term deals involving ad sellers combined with sharp increases in emerging ad formats.
Consumer advertisers continued to spend the most money on on-line advertising in 2002, accounting for 32 percent of the total investment. Computing firms made-up 18 percent, financial services businesses 13 percent, and media companies 12 percent.
The CPM (Cost Per Thousand) model also remained as the most popular pricing method, comprising 45 percent of all deal revenues in 2002. This was down though from 48 percent in 2001. Straight performance deals were up 9 percent to 21 percent, and hybrid deals, which are a combination of CPM and performance, declined 6 percent to 34 percent.
In Ireland, on-line advertising in the fourth quarter of 2002 was up nearly 20 percent on the same quarter a year ago. According to a survey by PwC for the Irish arm of IAB (IAB Ireland), which was released in April, total spend on Internet advertising in Ireland in 2002 amounted to EUR6.4 million, which was less than one percent of the overall advertising spend in this country.
IAB Ireland is carrying out a number of training courses in June and July in order to help those working in advertising, marketing and on-line publishing to understand the benefits of and get the most from interactive advertising.
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