Internet Ad Revenue Report 2002.

Internet advertising revenue in the U.S. totaled $1.5 billion for the fourth quarter of 2002, increasing over 2 percent from the third quarter, reflecting the first consecutive quarterly increase since the second quarter of 2000. Internet advertising for full-year 2002 totaled $5.95 billion. These top-line results are based on compiling data from the top 15 online ad sellers, which historically account for over 80 per cent of total industry revenues. The results of this revenue compilation are then extrapolated to calculate the total industry revenue figure. These estimates will be adjusted in the 2002 full-year report, including data breakouts, to be released next month. The Internet Ad Revenue Report is sponsored by the Interactive Advertising Bureau (IAB) and conducted independently by the New Media Group of PricewaterhouseCoopers (PwC).

While the $1.5 billion fourth-quarter figure decreased 9.8 percent from the same period a year earlier, it marks the first single-digit year-over-year percentage decrease since the first quarter of 2001. “The improved online advertising environment reflects a confluence of factors The publishers are offering a more manageable, uniform and understandable business proposition than ever before. The creative side has gotten smarter and is delivering compelling, entertaining content, which will only improve as the installed base of high-speed access users increases. This adds up to a fertile environment for the industry to right and propel itself,” said Greg Stuart, president and CEO, Interactive Advertising Bureau.

“The improved performance over the past two quarters reflects a stabilizing online advertising market, highlighted by continued strength in paid-for-search results. The recent upturn, coupled with forecasts of continued expansion of broadband distribution, bodes well for a strong year in 2003” said Tom Hyland, Chair, PricewaterhouseCoopers New Media Group.

Internet advertising for 2002 totaled $5.95 billion, a 17 percent decrease versus 2001. “Those who monitor the industry know that a few predominant factors contributed to the revenue decline, including the conclusion of some long-term advertising deals. What’s important to recognize is that the majority of online publishers are profitable, and their revenues continue to rise year-over-year. In such a volatile economy, we don’t want to see an inflated market – we want to see a mature, level and stable platform, where revenue fluctuations are even with the rest of the advertising business. Based on the mixed results across all media for 2002, that’s what I believe we are seeing here,” said Stuart.

Conducted by the New Media Group of PricewaterhouseCoopers the “Advertising Revenue Report” was started by the IAB in 1996, and represents data from all companies that report meaningful online advertising revenues. The results are the most accurate measurement of online advertising revenues because the data is compiled directly from information supplied by companies selling advertising on the Internet. All-encompassing in nature, the survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising.

For more information at http://www.iab.net