Online Reemerges As Fastest-Growing Ad Medium

Online ad spending expanded at six times the rate of the overall advertising economy during the first quarter of 2004, proving that it has reemerged as the fastest-growing segment of the media economy. During the quarter, advertisers invested nearly $2.3 billion on Internet advertising--an increase of 39 percent over the first quarter of 2003, and the greatest rate of expansion for the medium since the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers began tracking online ad spending in 1996.

By comparison, the overall marketplace for ad-supported media is projected to grow only 6.5 percent during the first quarter, according to estimates from ad tracking firm TNS Media Intelligence/CMR. The TNS estimates are based on a forecast released in January 2004. TNS has not yet released its final estimates for first-quarter 2004, but another ad tracker, Nielsen Monitor-Plus, is expected to release its first-quarter estimates next week.

While the first quarter was expected to be the weakest of 2004 in terms of overall ad spending growth, the IAB data indicates that the Internet is expanding at its fastest rates of growth since the original boom. In fact, first-quarter 2004's $2.3 billion total is actually $177 million more than the medium's previous peak of $2.123 billion in the fourth quarter of 2000.

Internet Takes A Bigger Share Of Overall Ad Market

Internet Total*
Ad $ Ad $
Growth Growth
Q1 '04 +39% +6.5%**
Q4 '03 +38% +4.2%
Q3 '03 +24% +7.3%
Q2 '03 +14% +8.6%
Q1 '03 +7% +4.9%

Source: Interactive Advertising Bureau's and PricewaterhouseCoopers' Internet Advertising Revenue Report; TNS Media Intelligence/CMR. *Local newspapers, network TV, consumer magazines, spot TV, cable TV, B-to-B magazines, local radio, Internet, national TV syndication, national newspapers, outdoor, national spot radio, Spanish- language network TV, Sunday magazines, free-standing inserts, network radio, local magazines. **Forecast.
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