Is Internet advertising poised for a new period of growth? Many industry observers are pointing to the recent Internet Advertising Bureau report as evidence that it is.
That report showed
Internet advertising revenue totaled $1.6 billion for the fourth quarter of 2002, up from the previous fourth-quarter estimate of $1.5 billion, and up 9% from the third quarter 2002. The increase in
2002 fourth quarter actual revenues from the previous estimate primarily reflected stronger than expected results from the top ad sellers. It's cause for more than reserved optimism that the business
is turning around.
"Advertisers are seeing eyeballs going to the web," said 24/7 chairman and CEO David Moore. "Now they're beginning to move money that way. Now this could be leading a
resurgence in this business. I believe it will be a steady resurgence. In fact I think all the stars are aligned for strong, steady, predictable growth in this business."
Other industry
executives point to two factors stressed in the report as reason for optimism. The first is that 66% of all Americans now have regular access to the Internet. That has been wooing advertisers since
then end of 2002, according to Moore and others. It has caused brands both large and small to integrate the Internet risk being ignored by a mass segment of the population.
"The Internet
is hitting all the right numbers in terms of media usage," said Robert Davidman, CEO of EarthQuake Media, which has brought campaigns from HBO and Cinemax among others to the Internet. "Clients need
to be where the people are and that's different from when I first started in this business back in 1994."
The second factor is continued evidence that the dot-com fallout is over. Said
PriceWaterhouse new media director Pete Petrusky in the IAB report: "Sellers are no longer cycling through lost revenue from the dot-com fallout." That has proven to be a key element in the 24/7
turnaround according to Moore. It has also been a key reason why online content publishers have found double digit increases in ad revenue this year according to Michael Zimbalist, executive director
of the Online Publishers Assocation.
"There are some good reasons to believe we're entering a new cycle of growth," Zimbalist said. "We've seen that for some time as members see endemic
growth from a baseline of legitimate advertisers."
New players in the game are finding success too. "We are finding that agencies and companies are highly interested in our value
proposition, differentiation and reach. In general we are beginning to see the advertising climate improve," said Azhar Rafee, senior Vice President, Reuters, which recently rebranded and redesigned
its website. "We are embracing new technologies to meet the demand of our clients. We remain focused on audience, which we believe is the best measure of our success. We have introduced new units such
as half-page ads., but our core philosophy is to make sure that we remain of value to our users, while providing flexibility our advertising clients need."