• by Jack Loechner , Staff Writer @mp_research, September 30, 2001

Released on September 24th, the Interactive Advertising Bureau's (IAB) latest Internet Ad Revenue Report revealed that online ad sales for the first two quarters of 2001 were down 7.8%, while ad sales for offline media such as spot TV were off 14.7%, spot radio 22.4%, and Sunday newspapers were down 10.4% according to CMR. "While the declines are not insignificant, they are well within the parameters of the overall advertising industry's experience and seen in perspective, they reflect our confidence in the long term value of the online medium," said IAB President & CEO Robin Webster.

Revenues more heavily consolidated within large media companies:

  +-------------------------+---------+---------+
|                         | Jan-Jun | Jan-Jun |  |                         |  2001   |  2000   |  +-------------------------+---------+---------+  | Top 10 Media Companies  |   76%   |   70%   |  |
Top 25 Media Companies  |   88%   |   83%   |  | Top 50 Media Companies  |   96%   |   91%   |  +-------------------------+---------+---------+  

Percentage of Internet Ad Revenue by Pricing Model
January - June

  +----------------------+------+------+------+  |                      | 2001 | 2000 | 1999 |  +----------------------+------+------+------+  | Straight CPM         | 50%  |
43%  | 42%  |  | Hybrid               | 40%  | 47%  | 51%  |  | Straight Performance | 10%  | 10%  |  7%  |  +----------------------+------+------+------+  

  +-----------------+---------+----------+  | Format          | Jan-Jun | Jan-Jun  |
|                 |  2001   |   2000   |  +-----------------+---------+----------+  | Banners         |   36%   |   51%    |  | Sponsorships    |   28%   |   27%    |  | Classifieds     |   15%   |
5%    |  | Slotting Fees   |   8%    |   N/A    |  | Interstitials   |   3%    |    3%    |  | Key Word Search |   3%    |    1%    |  | Referrals       |   2%    |    3%    |  | Rich Media      |
2%    |    2%    |  | Email           |   3%    |    3%    |  | Other           |   0%    |    5%    |  +-----------------+---------+----------+  

While the release is clear and informative, MarketingSherpa.com and ContentBiz felt that a more in-depth study with advertisers would be useful in planning contemporary marketing strategies. Their detailed "anecdotal" study is available on site for review, but some of the comments are noted here.

Tom Hyland, Chair of PricewaterhouseCoopers' New Media Group, who created the Report for IAB shared the following statistics with contentBiz, which have not yet been released to other media.

Percent of Online Media Sold by Type of Content Site

  +---------------+----------+---------+  |
Content       |  % sold  | % sold  |  |               | Qtr 1-2, | Qtr 1-2 |  |               |   2001   |  2000   |  +---------------+----------+---------+  | SE/Portal     |   27%    |   39%   |  |
Classified    |   14%    |   10%   |  | Technology    |   12%    |   11%   |  | Biz/Financial |   10%    |   15%   |  | News/Info     |   10%    |    9%   |  | Shopping      |    9%    |   n/a   |  |
Entertainment |    5%    |    4%   |  | Sports        |    3%    |   2%    |  | Travel        |    2%    |   n/a   |  | Other         |    7%    |    9%   |  +---------------+----------+---------+

Although the IAB report reported straight CPM buys as 50% of all sales, if the report had shown just June, that figure might have been significantly lower. According to all sources, CPC and CPA deals now dominate media buys online, with the exception of buys for high-ticket B2B offers. CyberReps Founder Mike Warsinske explains "Advertisers are laser focused on lead generation."

B2BWorks' Karen Breen Vogel explains, "the site/publisher should still receive credit for more than just an immediate sale -- lots of research studies show that online ads result in significant branding value."

Bob Hanna, SVP Sales at BURST! Media, adds, "The pop-under may begin to lose its popularity within the next 4 or 5 months. Pop-unders are primarily being used by high-volume advertisers who are interested in data capture and a low ROI. Traditional offline advertisers view pop-unders as obtrusive." ClickZen CEO Ruchit Shah says, "We've been shying away from the pop-under market due to the congestion of these on the Web."

Pop-ups, superstitials and interstitials also got glowing mentions as media formats that sell well, but the biggie almost a dozen media sellers volunteered as a killer app, was co-registration. The second most mentioned media sale was email newsletter ads, possibly because they are highly targetable.

Banners are still selling, albeit at rock-bottom rates. Richard Kahn of AdOrigin.com says, "The old reliable 468x60 still remains the most sought after size", but skyscrapers have proven to be the most popular of the 'new' IAB formats. However, he cautions that you may get far more enquiries than actual sales.

Run-of-network buys, are slowly yielding ground to media buys targeting surfers by demographic, geographic and/or content niche. Advertisers want to target users that have made purchases online in the past, and sites that are highly transactional. History of transactions is key data for advertisers. Having a human being handpick media buys is coming into fashion again.

Nobody knows what the events of September 11th will do the ad market, although many tell us their gut says ad buys are being delayed rather than canceled altogether.

Read all of the comments and quotes:
www.iab.net
www.contentbiz.com