• by December 4, 2000

Last week, researchers at Myers Reports predicted that 2001 online ad spending would increase nearly 70% over this year's levels. As a follow up, their special market analysis is also bullish on the health of the online ad industry, offering a "more detailed view of exactly where and how the dollars are coming in," as Jack Myers, chief economist for Myers Reports, explained.

The analysis, published in yesterday's edition of The Myers Report, indicates that online ad revenue from traditional media budgets is decreasing in share of total online spending, while ad revenue share coming from e-commerce is on the rise.

The data shows that online revenue from traditional advertising budgets will represent 50% of total online ad revenue of $9.6 billion this year (that number being an extrapolation of the PricewaterhouseCoopers/IAB official numbers.)

In 1998, traditional advertising budgets represented 78% of total online commercial revenue. Myers predicts that net revenue from e-commerce will garner a 31% share in 2000, up from 8% in 1998. Also, inventory bartered for goods, services, equity or other inventory will comprise 19% of online ad revenue this year, up from 14% in 1998.

In terms of ad format, banner ads are expected to continues to rule the online mix, making up 58% of total online ad spending. However, despite the hype, sponsorships are dwindling as a source of online media buys. Whereas in 1999 sponsorships made up 27% of online ad spending, this year Myers predicts that number will drop down to 23%. However, email is still on the rise, expected to inch up from 2 to 4% of total ad spend in 2000.