Wednesday, April 9, 2003
IAB AND PWC RELEASE “TOP-LINE” DATA FROM 2002 INTERNET ADVERTISING REVENUE REPORT

4Q 2002 Totals $1.5 Billion - 2.3% Increase Over 3Q 2002
Full-Year Revenue Totals Slightly Under $6 Billion

New York, NY – April 9, 2003 – Internet advertising revenue in the U.S. totaled $1.5 billion for the fourth quarter of 2002, increasing over 2 percent from the third quarter, reflecting the first consecutive quarterly increase since the second quarter of 2000. Internet advertising for full-year 2002 totaled $5.95 billion. These top-line results are based on compiling data from the top 15 online ad sellers, which historically account for over 80 per cent of total industry revenues. The results of this revenue compilation are then extrapolated to calculate the total industry revenue figure. These estimates will be adjusted in the 2002 full-year report, including data breakouts, to be released next month. The Internet Ad Revenue Report is sponsored by the Interactive Advertising Bureau (IAB) and conducted independently by the New Media Group of PricewaterhouseCoopers (PwC).

While the $1.5 billion fourth-quarter figure decreased 9.8 percent from the same period a year earlier, it marks the first single-digit year-over-year percentage decrease since the first quarter of 2001. “The improved online advertising environment reflects a confluence of factors The publishers are offering a more manageable, uniform and understandable business proposition than ever before. The creative side has gotten smarter and is delivering compelling, entertaining content, which will only improve as the installed base of high-speed access users increases. This adds up to a fertile environment for the industry to right and propel itself,” said Greg Stuart, president and CEO, Interactive Advertising Bureau.

“The improved performance over the past two quarters reflects a stabilizing online advertising market, highlighted by continued strength in paid-for-search results. The recent upturn, coupled with forecasts of continued expansion of broadband distribution, bodes well for a strong year in 2003” said Tom Hyland, Chair, PricewaterhouseCoopers New Media Group.

Internet advertising for 2002 totaled $5.95 billion, a 17 percent decrease versus 2001. “Those who monitor the industry know that a few predominant factors contributed to the revenue decline, including the conclusion of some long-term advertising deals. What’s important to recognize is that the majority of online publishers are profitable, and their revenues continue to rise year-over-year. In such a volatile economy, we don’t want to see an inflated market – we want to see a mature, level and stable platform, where revenue fluctuations are even with the rest of the advertising business. Based on the mixed results across all media for 2002, that’s what I believe we are seeing here,” said Stuart.
Conducted by the New Media Group of PricewaterhouseCoopers the "Advertising Revenue Report" was started by the IAB in 1996, and represents data from all companies that report meaningful online advertising revenues. The results are the most accurate measurement of online advertising revenues because 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 online services, free e-mail providers, and all other companies selling online advertising.

AboutPwC

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 consultation, assistance with mergers and acquisitions, tax planning and compliance, capital structuring and employee benefits and executive compensation packages.

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 over 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. For more information please visit the IAB web site at www.iab.net.

Contact:

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