EMarketer Releases Internet Ad Spending Projections

As if enough advertising revenue projections haven't been released recently, eMarketer offers another one. This one, however, focuses on online advertising, claiming that revenue will increase this year to $7.6 billion, up seven percent from last year's $7.1 billion. Next year, $10.3 billion will be spent with online spending jumping to $23 billion by 2005.

The most recent revenue projections have been for flat or even lower spending, although mostly in traditional media. Still, eMarketer's report is a favorable one that offers a glimmer of hope.

Three economic drivers are boosting online spending, according to eMarketer's Online Advertising report that was released last week: online advertising has become the ultimate targeted commercial vehicle; technology is evolving that supports richer advertising content; consumers can make actual transactions online.

The report examined virtually all areas of online advertising and made these other points:

* online advertising represents four percent of all ad spending this year, five percent next year and 12 percent by 2005

* the daily use of the Internet will grow from 24 minutes this year to 27.6 next year and 31.6 in 2003

* the top 10 web properties for advertising are AOL Time Warner, Yahoo!,MSN, Microsoft, Lycos, Excite@Home, About, Ebay, Disney and Amazon

* the average CPM price for online ads is about $30, but that is the rate card price, which eMarketer says is highly inflated. The price actually paid ranges from $5 to $10 with prices sometimes as low as $1

* CPM prices for all product genres have dropped with a few exceptions, the biggest being B2B with rates jumping to $41.97 from $33.56 last year

* hyprid pricing deals lead the way, paid by 45 percent of advertisers compared with 43 percent for CPM only deals and 12 percent for pay for performance

* 11,000 web sites sell ads now, but 74 percent of ad space is unsold.