Online Exclusive: Interactive News

Online Ad Spending Hits New High

Fifth Straight Quarter of Record-Breaking Revenue

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NEW YORK ( -- Internet advertising grew to a new high of $2.7 billion in the fourth quarter of 2004, according to the latest independent research conducted by PricewaterhouseCoopers for the Internet Advertising Bureau.

That marks the fifth record-breaking quarter of online ad revenue, according to the IAB.

"There are a few breakaway marketers who are really capitalizing on the medium," said Greg Stuart, president-CEO of the IAB, explaining the surge. "They have seized on the medium to enhance their competitiveness."

He mentioned marketers such as Vonage, which spends more than 50% of its advertising budget online. Ford Motor Co.'s Lincoln Mercury brand reported it spends 25% of its budget on the Internet, and McDonald's Corp. has increased online spending tenfold.

Estimates for full-year 2004 online revenue totaled just less than $9.6 billion -- a 32% increase over the $7.3 billion spent in 2003. That tops the previous ad-spending high -- the dot-com boom year of 2000, when annual ad revenue online reached $8.1 billion.

The $2.7 billion in fourth-quarter ad spending marked a nearly 24% spike from the same quarter in 2003, at $2.2 billion, and a 17% increase over the third quarter, with reported spending of $2.3 billion.

The estimated ad spending total is reached by surveying and aggregating 2004 fourth-quarter data from the top 15 online ad sellers.

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