Online Ad Revenues See Slight Decline

NEW YORK–Internet advertising revenue dropped a modest 4 percent in the third quarter to $1.792 billion, compared to Q2’s $1.868 billion, according to a report released Tuesday from the Interactive Advertising Bureau. The study, conducted independently by PricewaterhouseCoopers’ New Media Group, indicated that revenue for the first nine months of 2001 was $5.55 billion, as opposed to $6.06 billion for the first three quarters of 2000, off 8.4 percent.Despite the quarter-to-quarter decline, the interactive ad industry remained upbeat. “It appears that traditional advertisers are devoting a greater percentage of their budgets to online advertising, shifting budgets to mirror the shifting consumption of online media by their customers, and are loath to desert the medium that they all know holds the greatest future potential for them,” Tom Hyland, chair, PwC New Media Group, said in a statement.Consolidation within the industry continues with the top ten media companies deriving 75 percent of the revenue. Also, advertisers are experimenting with ad formats, according to the study. Banners brought in 35 percent of overall interactive advertising revenue, while sponsorships commanded 25 percent and classifieds, 17 percent. Meanwhile, interstitials and superstitials, rich media and e-mail each represented three percent of the revenue pie.Separately, IAB president and CEO Greg Stuart said Tuesday that the bureau’s new ad measurement guidelines will be issued before the end of the year. Four months ago, the IAB commissioned PwC to conduct an audit of 11 leading sites, portals and networks to determine how these companies arrived at their measurement numbers. A task force lead by George Ivie, CEO of the Media Rating Council, and representatives of the Advertising Research Foundation and ABCi, is in place to develop guidelines on how to measure basic metrics, identify the potential causes of over or undercounting, and encourage adoption of the resultant guidelines.–Ann M. Mack