IAB reports Web ad growth is down

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Online advertisers spent $129.5 million on the Internet during the first quarter, up 18% over the fourth quarter, according to the Internet Advertising Bureau industry group. That's a significantly slower growth rate than the 45% boost recorded between last year's third and fourth quarters. The IAB attributed the drop to traditional media cycles, in which the first quarter is generally slow.

IAB said computing products and telecommunications products led spending, accounting for 30% and 22%, respectively, of all revenue. IAB measures spending on all online platforms, including the World Wide Web, commercial online services, push media and e-mail.

Significantly, spending in the "consumer-related" category fell as a percentage of the total. Seventeen percent of the revenue came from this category in the first quarter, compared with 20% in the fourth quarter.

IAB also said that while banner advertising accounted for 70% of revenue, a healthy 24% came from sponsorship of online content.

"Advertising understanding of the Web value is not quite there yet," said Peter Petrusky, a director with the media and entertainment group at Coopers & Lybrand, which administers IAB's ad reporting program. "The Net's development as an ad-supported medium is directly tied to the delivery of qualified buyers to advertisers. [These numbers] show that this is happening, or advertisers would not be coming back."

IAB released the figures at its annual meeting in San Francisco, which drew more than 300 people. IAB also released a set of measurement guidelines and definitions that it intends to post on its Web site.

Copyright June 1997, Crain Communications Inc.

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