• by Ken Liebeskind , September 24, 2001

While online ad spending declined during Q1 and Q2 this year, the decline was lower than other media with similar short advertising buying cycles.

The Interactive Adverting Bureau's Internet Ad Revenue Report, released today, says that online spending dipped 7.8% from the same period last year, far less than spot TV (14.7%), national spot radio (22.4%) and Sunday newspapers (10.4%).

Internet ad revenue totaled $3.76 billion for the first two quarters--approximately $1.9 billion for each quarter.

The declines stem from the overall decline in the advertising market due to the softening economy.

The online drop "is not significant and seen in perspective, it reflects our confidence in the long-term value of the online medium," says Robin Webster, IAB President.

The report also breaks down spending by industry, showing that the consumer category is the largest with 30% of advertising, compared with 18% for computing and 13% for financial services.

A breakdown of the consumer category shows that 50% of advertising went to retail followed by 12% to automotive.

Straight CPM advertising continues to lead the way, with 50% of all advertising sold that way, followed by 40% hybrid and 10% straight performance. Webster call this "a healthy trend for the industry. Pricing models based on the variables publishers control are more reliable than those outside the publisher's control."

The study also demonstrates a growing diversity in ad formats, with banners still accounting for 36% of online ads, while sponsorships were 28%, classifieds 15% and slotting fees 8%. Classifieds increased 176% over the first two quarters of 2000. Slotting fees--the fee charged for premium ad placement, had never been listed before.

The report, a joint effort by the IAB and PricewaterhouseCoopers, is based on data from all companies with "meaningful ad revenues."

Webster was unavailable for comment today but another IAB spokesman, when asked what effect the terrorist attacks will have on the next round of Internet ad revenue numbers, says it's too soon to tell.