Online Advertising - Online Advertising Revenue

ONLINE ADVERTISING REVENUE

Online advertising revenue has increased steadily from 1996, when the Internet Advertising Bureau (IAB) began compiling its Advertising Revenue Report, through 2000. According to IAB reports, which were conducted independently by the New Media Group of PricewaterhouseCoopers, online advertising revenue grew from $906.5 million in 1997 to $1.92 billion in 1998. In 1999 the IAB report noted that quarterly online advertising revenue exceeded $1 billion for the first time in the third quarter.

Having changed its name to the Interactive Advertising Bureau, the IAB reported in April 2001 that year 2000 online advertising revenue reached $8.2 billion in the United States. Fourth quarter ad revenue increased by nine percent sequentially over the third quarter, but the percentage increase was markedly lower than historical levels. That reflected the overall slowdown in ad revenue in the second half of 2000 across all media sectors, as well as a higher revenue base. The report also noted that advertisers were being more selective in reaching the online audience of more than 140 million users. There was a higher concentration of ad spending in the top sites; high-profile, high-traffic Web sites were gaining ad revenue at the expense of smaller sites.

According to AdRelevance, in December 2000 the top two advertising sites on the Internet were Yahoo! and the Microsoft Network (MSN). MSN brought in the most advertising revenue that month with $180 million, while Yahoo! was second at $118 million. In terms of number of ads served, Yahoo! took the top spot with 7.6 billion ad impressions in December, while MSN had 6.3 billion ad impressions. It was the difference in advertising clients that gave MSN the top spot in terms of revenue. MSN's clients spent an average of $486,000 each on advertising there, while Yahoo!'s advertising clients spent an average of $105,000.