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Wednesday
- August 9, 2000
First Quarter Internet Ad
Revenues Almost Hit $2 Billion
Less than a year after Internet advertising revenues
broke the billion dollar mark per quarter in the United States,
it is fast approaching the two billion dollar per quarter
mark as revenues for the first quarter of 2000 hit $1.953
billion. The Internet Advertising Bureau's (IAB) Internet
Ad Revenue Report, conducted independently by PricewaterhouseCoopers
also reported that revenues for the first quarter grew 9.9
per cent over the fourth quarter of 1999, and 182 per cent
over the comparative first quarter of 1999.
In compiling the quarterly report,
PricewaterhouseCoopers has expanded the categorization
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, interstitials and email, the report
will now also track classifieds, referrals, rich media
and keyword searches. "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," noted Rich LeFurgy, Chairman
of the Internet Advertising Bureau and General Partner
of WaldenVC. "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 ecommerce capabilities of the Internet will continue
to fuel revenue growth throughout the year."
According to the report, the
categories which lead 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. Banner advertisements
continue to be reported as the predominate type of advertising,
accounting for 52% for Q1, sponsorships at 27%, interstitials
at 3% and email at 3%. The types of advertising being delineated
for the first time include classifieds (4%), referrals
(3%), rich media (2%) and keyword searches (1%). All other
ad types accounted for 5 % of the total.
Reflecting the continuing strength
of e-commerce, hybrid deals accounted for 48%, with CPMs
or impression-based deals at 42 % and performance-based
deals at 10% for the quarter. "An indication of the
health of the online advertising industry is that there
are no major surprises here," said 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. All-encompassing in nature, the survey
includes data concerning online advertising revenues from
Web sites, commercial online services, free e-mail providers,
and all other companies selling online advertising.
Online Banking Becomes Differentiator
According to CNBC:
"If you build it, they
will come. At least, that is what banks have been hoping,
as they have poured billions of dollars into creating online
products and services that often mirror their branch offerings.
Some of those investments have
been paying off, as these efforts have attracted a growing
number of customers at the largest commercial banks.
At the end of the second quarter,
three banks had 20 percent or more of their customer base
using the Internet, with Wachovia Corp. at 21 percent,
PNC Financial Corp. at 20.1 percent and Wells Fargo & Co.
at 20 percent.
'This is the first quarter where
you have penetration rates for several banks in excess
of 20 percent,' says Susan Roth, a bank analyst at Donaldson
Lufkin & Jenrette. 'If you can make the leap from there,
we can clearly draw the conclusion that the efforts of
those banks are self-funding.'..."
Click
here for the full story. [Link no longer active]
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