Friday, August 2, 2002
INTERNET AD REVENUE TOTALS $1.55 BILLION IN Q1 2002

Full IAB/PricewaterhouseCoopers Internet Ad Revenue Report To Be Issued Semi-Annually

New York, NY - August 2, 2002 - Internet advertising revenue in the U.S. totaled $1.55 billion for the first quarter of 2002, declining 6.5% from the 2001 fourth quarter, and down 18% from the first quarter of 2001. The Interactive Advertising Bureau (IAB) sponsors the Internet Ad Revenue Report, which is conducted independently by the New Media Group of PricewaterhouseCoopers (PwC). The IAB notes that ongoing weakness in revenue results continues to mirror the experience of most of the entire advertising market.

The first quarter online ad revenue figure was estimated by surveying and compiling 2002 first-quarter data from a group of leading Internet ad sellers, which have consistently accounted for the lion's share of 2001 revenues. The results of this revenue compilation were then extrapolated to calculate the total industry revenue figure. The first quarter figure is an estimate, and actual first quarter results will be disclosed along with actual second quarter revenues in August 2002. The structure of the report is being changed in the interest of timeliness, with estimates based on the methodology noted above for first and third quarters, followed by the actual results released following the second and fourth quarters.

The decline in Internet ad revenues for Q1 2002 was consistent with a number of other media sectors. According to CMR, 2002 first quarter ad spending was down 13.8 percent from the first quarter of 2001 for cable TV, 9.6 percent for magazines and 8.5 percent for national newspapers. In contrast, Spot Radio and Network TV both reported strong results for the first quarter of 2002, up 9.5 percent and 6.6 percent respectively (CMR). The surprisingly strong upfront TV market has caused some analysts to slightly raise their forecasts of total media spending for the year 2002.

"All ad sectors are currently in flux, with some sectors reporting positive gains while others continue to note declines," said Greg Stuart, President & CEO of the Interactive Advertising Bureau. "In making these changes to the IAB/PricewaterhouseCoopers Internet Ad Revenue Report we are in effect recognizing the volatility of the market and providing educated estimates of online ad revenue based on the recognized expertise of PwC. This snapshot view of the state of Internet ad revenue will give our members a more timely overview of the business, allowing for better business planning."

Conducted by the New Media Group of PricewaterhouseCoopers on an ongoing basis, with estimates issued for the first and third quarters and full results released following the second and fourth quarters, the "Internet Advertising Revenue Report" was started by the IAB in 1996, and represents data from all companies that sell meaningful online advertising revenues. The results reported are the most accurate measurement of online advertising revenues because the data is compiled directly from information supplied by companies selling online advertising. All-encompassing in nature, the survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising.

About PwC
PricewaterhouseCoopers (www.pwcglobal.com), the world's largest professional services organization, helps its clients build value, manage risk and improve their performance. The PricewaterhouseCoopers New Media Group -- with offices in New York, Los Angeles, Seattle, San Francisco Bay Area, and Boston -- combines content and technology specialists to provide comprehensive service to dynamic entrepreneurial companies. Services include business assurance services, ad delivery and privacy attestation and advisory services, assistance with mergers and acquisitions, tax planning and compliance, capital structuring and employee benefits and executive compensation packages.

About the IAB
Founded in 1996, the Interactive Advertising Bureau (IAB) is the leading interactive advertising association and represents companies responsible for selling over 75% of online advertising in the United States, including; AOL, CNET, MSN, Overture Services, Walt Disney Internet Group, Yahoo, and 100 others. Its activities include evaluating and recommending standards and practices, fielding research to document the effectiveness of the interactive medium and educating the advertising industry about the use of interactive advertising. Membership includes companies that are actively engaged in, and support the sale of interactive advertising.

Contact:

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