Second Coming of Internet Advertising

Online advertising has paved its way into the Information Highway, turning in its best year of ad spending since 2001, according to a study conducted by PricewaterhouseCoopers and sponsored by the Interactive Advertising Bureau (IAB).

Advertising revenues surged to $1.74 billion in the third quarter, marking a 20 percent escalation over the same quarter in 2002 and a 5 percent increase over second quarter 2003.

Bob Coen, senior vice president/director of forecasting at Universal McCann, predicted Monday that these strong third quarter estimates for ad spending could essentially result in a 15 percent annualized rate of growth for the medium. If Coen is correct, Internet ad spending will ultimately inflate at about three times the rate of growth of the overall ad industry in 2003.

Apparently, the Internet is proving itself a vital and abundant marketplace for advertisers. According to Tom Hyland, chairman of PricewaterhouseCoopers, the latest revenue increase can be attributed to improving economic conditions among both marketers and the Internet advertising arena.

“The basic foundations of interactive advertising are built on a solid business model,” Hyland stated. “The fundamentals of interactive advertising will further drive industry revenue higher.”

Moreover, advertisers are now easily persuaded to invest larger sums of money online due to improving technology; visually entertaining ads and viewer response tracking are but two of the attractions.

The IAB and PricewaterhouseCoopers survey consists of data from free email providers, online services, and various advertising companies. All third quarter figures were estimated by collecting data from the top 15 online ad sellers. Results were subsequently extrapolated to calculate an estimated industry revenue total.

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