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Internet advertising rocketed 80% to an estimated $359.4 million in the first quarter, according to spending data that confirm the boom on the Web.

InterMedia Advertising Solutions, sister company to VNU's Competitive Media Reporting, today releases its much-delayed "InterWatch" spending report, which shows strong growth in Web spending across industries.

For the first time since InterMedia began tracking Web spending in 1996, computer- and online-related companies' portion of the pie dipped below 40%-to 38.2% in the first quarter of 1999 compared with the year-earlier period. Category spending did increase by 38.9%, but that rate paled compared to explosive growth in other categories. Retail spending increased fivefold, and telecom and pharmaceutical Web spending jumped 128.9% and 122.6%, respectively.


Among the top 10 advertisers, Microsoft Corp. and IBM Corp. continued to lead the pack (see chart). But Bank One Corp.'s First USA vaulted into third with a sixfold increase. First USA has aggressively pushed its credit cards and, recently, Wingspan Bank.

The world's hottest PC marketer posted the biggest increase among the top 10: Dell Computer Corp.'s measured spending shot up 28 times, off a small base.

Blue-chip marketers increased their Net bets in the first quarter, with Procter & Gamble Co. upping spending 266.3% to $1.95 million. E-tail rivals and ranked 13th and 14th, respectively, with spending of $2.3 million and $2.2 million. No. 4 General Motors Corp. and two other automakers appeared in the top 20: No. 16 Toyota Motor Sales USA, at $1.9 million, followed by American Honda Motor Co., at $1.8 million.


The percentage of total media spending allocated to the Internet grew to 1.8% from 1.3% for all of 1998, InterMedia reported. But that varied widely among industries. Online and computer services led the way, with 20.9% of ad money allocated to the Internet. Computer and software marketers and investment brokerages put a respective 8% and 3.4% of budgets into the Web. But car marketers put just 0.64% of their ad budgets into the Web; drug and toiletries sellers allocated 0.5%; bath soap brands put in 0.25%.

InterMedia tracks spending for 400-plus industries on 300-plus sites. The first-quarter number is little more than half the $693 million estimated by the Internet Advertising Bureau, which gets data from more than 1,500 sites and 200 companies, including America Online. InterMedia, which doesn't track AOL, gets its data independently.

InterMedia President Joe Philport cautioned his spending figures are estimates based on rate cards and do not reflect discounts or barter. The figures are most useful, he said, for comparisons of brands and industries.


InterMedia is late with its data, which Mr. Philport attributed to difficulties of measuring ads in an evolving medium and meshing Internet sites and brands with CMR. Mr. Philport said InterMedia should be caught up by the end of the year.

Rivals are encroaching on InterMedia's turf. Audience-measurement service Media Metrix is buying start-up AdRelevance, which is developing real-time online ad-spending estimates.

Mr. Philport said InterMedia is looking at adding new services, such as ad creative messages-something Nielsen/NetRatings and AdRelevance offer. "Our focus right now is tracking ads and not [measuring] audience," he said. "[But] there will be convergence."

VNU is buying ACNielsen Corp., a major shareholder and partner in NetRatings,

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