Monday, April 6, 1998
INTERNET ADVERTISING SEES BREAKTHROUGH YEAR IN 1997

Internet Advertising Bureau (IAB) Year-End Survey Cites Strong Fourth Quarter As Spending Trends Toward Traditional Media Model

Consumer Brand Advertising Continues To Be Strong

NEW YORK - April 6, 1998 - Citing a strong fourth quarter surge in Internet advertising, the InternetAdvertising Bureau via its industry-leading "Advertising Revenue Reporting Program" announced today that $906.5 million was spent on online advertising in 1997. According to the report, conducted by Coopers & Lybrand, advertising revenues continued their upward trend, with fourth-quarter revenue totaling 48 per cent over the third quarter. The 1997 fourth quarter revenue figure marks, the eighth record-setting quarter in a row. Total revenues in the first quarter of 1997 were $129.5 million, the second quarter posted $214.4 million, with the third quarter reporting revenue of $227.1 million.

1997 was definitely a breakthrough year for Internet advertising," said Rich LeFurgy, IAB Chairman and Senior Vice President, Advertising, ABC News/ESPN Internet Ventures. "The industry saw continued spectacular growth, with a billion dollar run-rate established in the last quarter of the year. This places the medium within the ranks of traditional media for the first time. We also clearly see online advertising acting like traditional media, with seasonality trends emerging as an example. Growth is very strong. When we compare advertising revenue for the television industry in equivalent dollars for its third year, the Internet is slightly ahead, at $907 million compared to television's $834 million. Importantly, this continuous growth is consistent and stable, reinforcing the conclusion that marketers are increasingly recognizing the importance of the medium as part of the full media mix, whether it's for brand marketing, direct marketing, retailing or consumer service. The multi-tasking nature of the medium ensures its future growth."

Leading industry categories in the fourth quarter were computing products (33%), consumer-related (26%), financial services (11%), new media (11%), and telecom (9%). Moreover,consumer related was the leading industry category for the year at 31%, followed by computing products (30%), financialservices (18%), telecom (11%) and new media (10%).   Conducted by the New Media Group of Coopers & Lybrand on an ongoing basis, with results released on a quarterly basis, the "Advertising Revenue Reporting Program" was started by the IAB in 1996, and represents data from more than 200 publishers. The results reported are the most accurate measurement of online advertising revenues since the data is compiled directly from information supplied by companies selling advertising on the Internet. All-encompassing in nature, the survey includes data concerning online advertising revenues from Web sites, commercial onlineservices, off-line delivery services and e-mail providers.

"This is the year that the Internet has come into its own, as we see continued strong quarter-to-quarter andyear-to-year growth, increasing U.S. advertising market share and a deeper penetration of advertising beyond the top50 publishers," noted Tom Hyland, Chairman, Coopers & Lybrand New Media Group. "We are witnessing the evolution of the Internet into a vitally important consumer advertising medium, with increased online spending and consumer usage,underscoring its value to advertisers."

Founded in 1996, the IAB is the leading online advertising association with over 175 active members. Its activities include evaluating and recommending standards and practices,fielding research to document the effectiveness of the online medium and educating the advertising industry about the use of online advertising. Current membership includes companies that are actively engaged in the sales of Internet advertising, with associate membership including companies that support advertising, including interactive advertising agencies, measurement companies, research suppliers, technology suppliers, traffic companies and other organizations from related industries. A global organization, the IAB has member countries including Canada, France and Germany, and is currently developing membership countries in Asia and Latin America, as well as other countries in Europe.

Contact:

Marla Nitke IAB
212-380-4714
[email protected]