Online Ad Sales Rose 14% In 2QOnline Ad Sales Rose 14% In 2Q

The economy seems to be rebounding and so are Internet ad sales. Online advertisement spending reached $1.66 billion in the second quarter, up 13.9% from the same period last year, according to the Internet Ad Revenue Report compiled by the Interactive Advertising Bureau and PricewaterhouseCoopers. It was the third straight quarterly increase.

"Our prognosis for a continued and steady recovery is being realized, and the outlook remains bright," bureau CEO Greg Stuart says.

PricewaterhouseCoopers new-media director Pete Petrusky says recent revenue totals strongly suggest the industry has rebounded, reflecting improving fundamentals: increased buy-side demand, firming prices, an improved selling process, and continued strength in broadband user adoption.

According to the report, keyword search continued to demonstrate its strength as the leading indicator of growth for the overall interactive-ad industry, representing 31% of total ad revenue for the second calendar quarter of 2003, more than triple its hold during the second quarter of 2002, and rising nearly 13% in total ad revenue over the first quarter of 2003. The second quarter is the most recent period examined by the researchers.

Rich media--including audio, text, and animation--doubled its share in the second quarter, increasing from 3% a year earlier to 6%, possibly reflecting advertisers' recognition of faster broadband adoption.

Second-quarter share of display ads, formerly called banner ads, fell to 22% from 32% in the past year, with sponsorships plunging to 11% from 24%.

In the second quarter, consumer advertisers continued to spend the most online, slightly increasing their share. Within the consumer category, retail advertisers comprised the largest segment in the major consumer category, spending 44% of total dollars. Business services represented 10% of ad spending in the second quarter, up from 6% a year earlier.

"With Internet usage and broadband adoption continuing to escalate," Stuart says, "marketers are throwing their weight and dollars behind interactive advertising."