Internet Ad Revenue $1.55B In Q1 2002.

Internet advertising revenue in the U.S. totaled $1.55 billion for the first quarter of 2002, declining 6.5% from the 2001 fourth quarter, and down 18% from the first quarter of 2001. The Interactive Advertising Bureau (IAB) sponsors the Internet Ad Revenue Report, which is conducted independently by the New Media Group of PricewaterhouseCoopers (PwC). The IAB notes that ongoing weakness in revenue results continues to mirror the experience of most of the entire advertising market.

The first quarter online ad revenue figure was estimated by surveying and compiling 2002 first-quarter data from a group of leading Internet ad sellers, which have consistently accounted for the lion’s share of 2001 revenues. The results of this revenue compilation were then extrapolated to calculate the total industry revenue figure. The first quarter figure is an estimate, and actual first quarter results will be disclosed along with actual second quarter revenues in August 2002. The structure of the report is being changed in the interest of timeliness, with estimates based on the methodology noted above for first and third quarters, followed by the actual results released following the second and fourth quarters.

The decline in Internet ad revenues for Q1 2002 was consistent with a number of other media sectors. According to CMR, 2002 first quarter ad spending was down 13.8 percent from the first quarter of 2001 for cable TV, 9.6 percent for magazines and 8.5 percent for national newspapers. In contrast, Spot Radio and Network TV both reported strong results for the first quarter of 2002, up 9.5 percent and 6.6 percent respectively (CMR). The surprisingly strong upfront TV market has caused some analysts to slightly raise their forecasts of total media spending for the year 2002.

“All ad sectors are currently in flux, with some sectors reporting positive gains while others continue to note declines,” said Greg Stuart, President & CEO of the Interactive Advertising Bureau. “In making these changes to the IAB/PricewaterhouseCoopers Internet Ad Revenue Report we are in effect recognizing the volatility of the market and providing educated estimates of online ad revenue based on the recognized expertise of PwC. This snapshot view of the state of Internet ad revenue will give our members a more timely overview of the business, allowing for better business planning.”