Web advertising is on track to hit $4 billion this year, according to Internet Advertising Bureau data. In what could bode well for the sustainability of the category, most of the booming business is coming from established marketers rather than fickle dot-coms.
The IAB said U.S. Web ad revenue in the second quarter rocketed 121% from a year earlier--to $934.4 million, with first-half spending jumping 110% to $1.6 billion. PricewaterhouseCoopers, which compiles the data, raised its '99 Web advertising run rate to about $4 billion, from $3 billion.
That would put Internet ads at about 2% of the U.S. ad market. Last year, IAB reported, Web ad revenue totaled $1.98 billion.
"The run rate is really picking up," said Tom Hyland, chairman of PricewaterhouseCoopers' New Media Group. He said most Web growth is coming from established marketers, with dot-coms appearing to be just "a blip" on the screen.
DOT-COM SPENDING IRONY
Mr. Hyland noted the irony that dot-coms are spending billions on offline ads. But since many ad insiders expect dot-com spending to pull back in 2000, the fact that Web ad spending is growing without much help from dot-coms bodes well for Web advertising next year.
Several thousand significant sites rely on Web ads, but IAB data show the top 10 publishers garnered 75% of second-quarter revenue.
"The big are getting bigger," said IAB Chairman Rich LeFurgy.
Banner ads accounted for 59% of second-quarter revenue, about even with last year.
Revenue from sponsorships fell from 37% to 28% of the total, a surprise given the attention sponsorships have gotten. Mr. LeFurgy said rich-media ads appear to be picking up some of the slack; an "other" category, largely rich media, grew to 8% of revenue from 2% a year ago.
Copyright November 1999, Crain Communications Inc.