Proving that the Web is winning the pocketbooks of Madison Avenue, the Internet Advertising Bureau last week reported second-quarter Internet ad revenue of $214.4 million, up 66% over the first quarter.
That brings total Internet ad spending for the first half of 1997 to $343.9 million, up 322% over online spending in the first half of 1996.
MORE ADVERTISERS COMING TO WEB
"These are the strongest [results] yet we've seen in terms of advertising on the Internet," said Rich LeFurgy, IAB chairman and senior VP-advertising at ESPN/ABCNews Internet Ventures, New York.
"We're seeing a ramping up of more and more advertisers coming on to the Web," Mr. LeFurgy added. "Advertisers are moving out of the experimental mode into the commitment mode."
SPONSORSHIPS ON THE RISE
Another important finding is that while banner advertising accounted for 54% of total advertising, sponsorships made up 41% of total revenue.
"A lot of clients we've been talking to lately have been interested in sponsorships, but we didn't think it would be that high," said Andrew Batkin, chairman of ad rep company Softbank Interactive Marketing, headquartered in New York.
CONSUMER ADS NO. 1 CATEGORY
In a month-to-month breakout, online ad sales were $53 million in April, $70 million in May, and $91 million in June.
Also significant for the industry is that the No. 1 online advertising category was consumer related, making up 30% of all Internet ad spending in the second quarter. Other big Internet spenders were in financial services (22%) and computing products (21%).
In the first quarter, the top online advertisers were computing products (30%), telecommunications (22%) and consumer related (17%).
"Consumer brand advertisers are spending more online," said Mr. LeFurgy.
Getting these traditional advertisers to spend ad dollars on the Web has been a challenge for the industry. Now, it seems they're finally coming on board.
INTERNET MAKES THE MAP
"[The Internet] is still a tiny blip on the radar screen of media planners, representing a tiny fraction of buys in other media. But it's made the map," said Peter Storck, group director of online advertising at Jupiter Communications.
Mr. Storck said the IAB's second-quarter numbers are just slightly higher than Jupiter's projections.
In a report released in August at its Online Advertising 2 conference in New York, Jupiter estimated online advertising revenue would reach $940 million this year, jumping to $7.7 billion in 2002.
Jupiter put this year's second-quarter revenues at $205 million, growing to $240 million in the third quarter and roughly $320 million in the fourth quarter.
NUMBERS REFLECT OVERALL GROWTH
"The IAB results bear out our own projections and what we pretty much expected to see," said Mr. Storck.
Others in the online ad industry said the numbers reflect the overall growth of the Internet and the audience using it.
"There's more `there' there," said Kyle Shannon, co-founder of interactive shop Agency.com in New York, pointing to increased functionality and services beyond just information.
The IAB's Advertising Revenue Reporting Program is administered by Coopers & Lybrand's New Media Group, and is compiled from data collected from more than 200 companies representing between 800 and 900 Web sites.
Copyright October 1997, Crain Communications Inc.