Online Exclusive: Interactive News

First-Quarter Online Ad Spending Up 26% From Last Year

Marketers Continue to Shift Money Onto Web

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NEW YORK (AdAge.com) -- Ad spending on the Internet continues to break records as spending online totaled more than $2.8 billion for the first quarter of 2005, making this the highest reported quarter in nine consecutive quarters of growth, according to the Interactive Advertising Bureau.

Internet advertising spending continues to increase.

The first-quarter spending figure represents a 26% increase from the $2.2 billion spent during the same period last year, and it spiked 4.3% from the fourth-quarter 2004 figure of $2.7 billion.

Audience fragmentation
Consumer adoption of broadband connections and the fragmentation of TV viewers, along with the growth of the Internet audience in general, are all factors contributing to the steady spending increase each quarter, according to Greg Stuart, president-CEO of IAB, an association of over 200 leading interactive companies.

"We're not surprised that things are still going well," Mr. Stuart said. "We would expect that. But I'm not sure that I would have expected a number as high as 26%. That speaks to just how well the different online sectors are doing."

The Advertising Revenue Report, conducted by the media group of PricewaterhouseCoopers, was started in 1996 by the IAB. It includes data from all companies that report meaningful online ad revenue. Information is collected from revenue from Web sites, commercial online services, free e-mail providers and other companies selling online advertising.

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