IAB: '98 ad revenue nears $2 bil

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Internet ad revenue reached $1.92 billion in 1998, more than double the $906.5 million spent in 1997, according to an Internet Advertising Bureau report being released today.

"There is continued confidence in the [online] medium," said Rich LeFurgy, chairman of the IAB, noting that online ad spending surpassed outdoor advertising in total dollars spent for the first time.

The report, administered for the IAB by PricewaterhouseCoopers, found that 92% percent of total Internet ad revenue is derived from the top 50 Web sites, compared with 83% last year.


"We're getting more online media companies participating in online revenue," said Mr. LeFurgy. The dominant pricing model, making up 54% of total revenue, continues to be a hybrid, or "advercommerce" deal, said Mr. LeFurgy. Such deals are made up of an upfront payment for cost per thousand impressions and a backend payment based on performance, such as the cost per click or cost per sale.

CPM-only deals were 40% of total revenue, while performance-based deals made up 6% of revenue.

"The clear momentum is in the hybrid model," said Mr. LeFurgy. "It's a win-win for publishers and clients."

Copyright May 1999, Crain Communications Inc.

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