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CARIBBEAN BUSINESS

Internet Advertising Begins To Take Off

Online Ad Spending For 2000 Was 78% Greater Than 1999

By HECTOR BERRIOS FIGUEROA

October 18, 2001
Copyright © 2001 CARIBBEAN BUSINESS. All Rights Reserved.

Internet advertising revenue in the U.S. reached $8.2 billion last year, a 78% increase over the $4.6 billion reported for 1999, according to the latest Internet Advertising Revenue Report published by the Internet Advertising Bureau (IAB).

Published quarterly and compiled by accounting firm Pricewaterhouse Coopers, the report was initiated by the IAB in 1996. It includes data reflecting online advertising revenue from websites, commercial online services, e-mail providers, and other companies selling online advertising.

The IAB expanded the categories of ad types used in the report, reflecting the wider array of message vehicles being adopted by online advertisers. In addition to monitoring banners, sponsorships, interstitials, and e-mail, the report will now also track classifieds, referrals, rich media and keyword searches.

Emerging ad formats continue to show strength in revenue results, while ad banners gradually decline. Advertising formats reporting the strongest increases in the fourth quarter (4Q) of 2000 included content sponsorships (31%), classifieds (10%), and e-mails (4%) up from 28%, 9%, and 2%, respectively in 3Q 2000.

Banners accounted for 40% of revenue during 4Q 2000, a decline from 46% reported in 3Q 2000, and down from 53% in 4Q 1999.

Spending per industry

Consumer brand advertisers represented the largest category of advertiser spending, accounting for 32% of 4Q 2000 revenue, and 31% of full-year 2000 revenue, up from 30% reported in 3Q 2000 and full-year 1999.

Computing advertisers–the second largest category–accounted for 21% of 4Q 2000 revenue, up from 16% reported in 4Q 1999. This category followed by the financial services industry at 13%, down from 17% in 4Q 1999.

Media companies accounted for 9% of 4Q 2000 revenue, up from 3.4% in 4Q 1999, while business services companies contributed 6% of 4Q 2000 revenue, down from 7% reported in 4Q 1999.

Retail and automotive companies, at 48% and 17%, respectively, together accounted for almost two thirds of 4Q 2000 consumer-related revenue, followed by travel/hotels (9%), music (7%), and amusement (4%).

Internet advertising has surpassed various traditional media sectors since 1996–including outdoor advertising and business/trade publications–and is quickly approaching the nearly $11.2 billion ad revenue for cable TV in 2000.

Internet Advertising Quarterly and Annual Revenue Growth for 1996—2000
(in millions)
1Q 1996 $30
2Q 1996 $52
3Q 1996 $76
4Q 1996 $110
Total 1996 $268
     
1Q 1997 $130
2Q 1997 $214
3Q 1997 $227
4Q 1997 $336
Total 1997 $907
     
1Q 1998 $351
2Q 1998 $423
3Q 1998 $491
4Q 1998 $656
Total 1998 $1,920
     
1Q 1999 $693
2Q 1999 $934
3Q 1999 $1,217
4Q 1999 $1,777
Total 1999 $4,621
     
1Q 2000 $1,953
2Q 2000 $2,124
3Q 2000 $1,986
4Q 2000 $2,162
Total 2000 $8,225

Source: Pricewaterhouse Coopers LLP/IAB Internet Advertising Revenue Report

This Caribbean Business article appears courtesy of Casiano Communications.
For further information please contact
www.casiano.com

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