IAB reports '96 Internet ad spend

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Advertisers spent $267 million on the Internet and online services last year, according to a report from the Internet Advertising Bureau released at the @d:tech conference in Chicago on Tuesday. Of that figure, only 3% was in barter and 1% in cross-media or package deals.

The amount of barter in the total may be artificially low, because the IAB allows publishers to report the cash value of the bartered ads. Many publishers value barter ads at less than the price of ads that are sold for cash, so the actual volume of barter may be higher, the IAB said.

"We'll keep a watch on barter, because it is of interest, we believe, to the industry," said Tom Hyland, partner in the Media and Entertainment Group of Coopers & Lybrand, which administered the survey.

Spending in the fourth quarter was $109.5 million, up 45% over the third quarter's $75.6 million. Spending rose dramatically throughout the year: $29.9 million was spent in the first quarter and $51.9 million in the second.

The top 10 publications accounted for nearly two-thirds of all Internet ad revenue in December, only slightly less than in March, when the top 10 accounted for 72% of all revenue. Adding even more evidence to the notion that the big sites will get bigger and the small smaller, the top 50 accounted for 94% of revenue in December, the same as in March.

The IAB's figure is derived from actual reported statements of more than 200 sites, representing about 86% of ad-supported sites. The remainder is estimated. The confidential survey doesn't reveal which publishers earned the most or which advertisers spent the most.

The $267 million total, however, is slightly lower than the one reported earlier this month by Jupiter Communications. Jupiter said $301 million was spent on online advertising last year, including about $40 million on commercial services such as America Online. Its report is based on studying rate cards and noting ad appearances on various Web sites.

Copyright March 1997, Crain Communications Inc.

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