• by John Hallenborg , June 18, 2002

Banners lose ground; classifieds and rich media gain. The PricewaterhouseCooper/Internet Advertising Bureau’s survey of online advertising for the second quarter of 2000 shows that the banner is alive and well as a creative medium, but losing ground as the favored object of online advertising dollars.

The banner took a full 50% of the $2.12 billion that the study says was spent on online advertising during the quarter. However, this percentage marks a decline from previous levels—52% in the first quarter of the year and 59% in the second quarter of 1999. Meanwhile, classifieds and rich media—which weren’t even on the online advertising map a year ago—took up a combined 9% share of the online ad dollar for Q2 ‘00: 7% to classifieds and 2% to rich media.

The emergence of rich media may hold special implications, says Peter Petrusky, director of new media for PwC. Although rich media currently garners only 2% of total ad dollars in the quarter, it is “coming up as bandwidth becomes less of an issue,” Petrusky says. And, it could energize the opportunity for brand-building ad campaigns. Branding campaigns generally try to create an emotional experience for people, but up until now, advertisers haven’t been able to “get too slick on the net,” Petrusky says. “They can’t get a real emotional feel going. But broadband going into the home will change this.”

The survey also broke out ad spending for other types of creative, including sponsorships, key word searches, referrals, e-mail, and interstitials. Sponsorships accounted for 27% of online ad spending—no change from the previous quarter—while interstitials at 3% and keyword searches at 1% also remained level with the previous quarter. Referrals rose to 4% from 3%, and e-mail dropped from 3% to 2%.

The survey also shows a change in pricing models. In the second quarter of 1999, hybrid pricing—which combines cost-per-impression with a pay-for-performance component—was the model for 52% of the ad dollars spent online. In the current survey, the hybrid model accounted for only 46% of the dollars. Meanwhile, the CPM model rose from 41% a year ago to 44% this year. Straight performance based deals accounted for only 10% of ad dollars this year. The $2.12 billion that the survey says was spent on online advertising in Q2 ‘00 marks an 8.8% increase over Q1 and a 127% increase over Q2 ‘99. It brings total online ad spending for the first half of 2000 to more than $4 billion, a significant 150% rise over first half 1999.

Some things don’t change, however. Online ad spending is still directed to the titans of the internet such as Yahoo, AOL, and MSN, according to the survey. The top 10 sites, which Petrusky declines to name, accounted for 71% of ad dollars in Q2 ‘00, and the top 50 soaked up 91%.

Freelance writer Dale Chaney can be reached at dale_chaney@msn.com.