Internet Ad Revenue $1.7 Billion For Q4 2001

by May 23, 2002, 12:00 AM

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As eMarketer rightly predicted back in January, Internet advertising revenue in the U.S. declined 7.5% in the fourth quarter of 2001, totaling $1.7 billion, according to the latest announcement from the Interactive Advertising Bureau. Internet advertising for all of 2001 totaled $7.2 billion, down 12% versus 2000.

The IAB noted that overall weak revenue results were not unexpected, and continue to mirror the experience of the entire advertising environment. In fact, the Internet ad results compare favorably to some of the more established ad sectors, which experienced steeper declines during the reporting period.

The IAB says that the larger traditional advertisers have begun to recognize the value that Internet advertising brings to their overall marketing efforts, and that by integrating their offline efforts with online exposure, the combined effect offers them strong growth potential. This was amply demonstrated by the results of the Unilever/MSN Media Mix research released in February of this year, in which the research suggested that increased online advertising may result in increased key metrics such as brand awareness, brand attributes and purchase intent and branding effectiveness.

In 2001, the consumer-targeted category continued to be the largest overall segment for online advertising (30%) with the retail segment (50%) driving these ad revenues. Not surprisingly, industry concentration continues, with revenues increasingly being consolidated within large media companies, similar to most other media sectors.

According to the report, the CPM pricing model is still the model of choice, comprising 45% of all deal revenues in the fourth quarter of 2001, while straight performance contracts were at 13%, and hybrid deals, a combination of CPM and performance totaled 42%.

Percentage use of various ad formats remained fairly consistent in 2001. Formats tracked and their respective share of 2000 and 2001 full year revenue are:

The top three ad formats -- banners, sponsorships and classifieds -- still account for the lion's share of industry revenue. The slight decline in classifieds partly reflects continued weakness in the job market, and was partially offset by growth in auction-based listings," said Peter Petrusky, Director, PricewaterhouseCoopers New Media Group.

 
                         2000   2001 
Banners                   48%    36% 
Sponsorships              28%    26% 
Classifieds                7%    16% 
Slotting Fees             N/A     8% 
Key Word Search            1%     4% 
Inter/Superstitials®       4%     3% 
Email                      3%     3% 
Rich Media                 2%     2% 
Referrals                  4%     2% 
Other                      3%     0% 

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