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Internet Advertising Bureau Announces 1996 Advertising Revenue Reporting Program Results

Total Internet Ad Spending Reaches $267 Million

Chicago, IL – March 25, 1997 – The Internet Advertising Bureau (IAB) today announced the 1996 year-end results of its “Advertising Revenue Reporting Program,” with total annual spending reaching $267 million. According to the report, advertising spending grew steadily throughout 1996 with fourth quarter revenue increasing almost 45% from the third quarter. Fourth quarter revenue reached $109.5 million, a record total. Total spending in Q1 was $29.9 million, Q2 posted $51.9 million and Q3 posted $75.6 million.

Five leading industry categories dominated Internet advertising spending during 1996. The largest categories were: computing products (38%), consumer-related (20%), new media (17%), telecom (9%) and business services (6%). For 1996, the survey also found that the vast majority of the revenue transactions was cash-based with barter deals approximately 3% of total spending.

The results represent the most accurate measurement of online advertising revenue, compiled from data collected directly from companies engaged in selling advertising on the Internet — rather than projections or estimates. The survey is also the most inclusive report of online ad spending, including all forms of Internet publishing including Web sites, commercial online services, off-line delivery services and e-mail.

Over the past nine months, Coopers & Lybrand’s New Media Group has administered the “Advertising Revenue Reporting Program” which the IAB first announced at its premier meeting in June, 1996. The survey’s 1996 Q1-Q3 revenue totals were announced at the IAB fall general meeting in December.

The latest round of the survey represented data from more than 200 Internet publishers, representing more than 86% of industry revenues reporting directly to the program. Advertising spending across the balance of the industry are conservative estimates derived from public information sources.

“The 45% quarter-to-quarter increase is a clear indication of the growing role advertising revenue is playing in supporting the Internet as it evolves into a true consumer medium,” said Rich LeFurgy, chairman, IAB Board, and vice president of advertising and marketing, Starwave Corp. “All indications are that we will continue to see significant growth throughout the year 1997.”

“The Advertising Revenue Reporting Program is based on actual sales reports which provides a highly accurate and reliable picture of the industry’s growth,” said Tom Hyland, co-chair of the Coopers & Lybrand New Media Group. “This is a benchmark that contributes to the overall industry credibility while providing individual buyers and sellers with information to operate their businesses more efficiently.”

Coopers & Lybrand will administer the program on an ongoing basis, with results released quarterly. Under the program, all data provided to Coopers & Lybrand is strictly confidential and is only reported in aggregate form. No individual online advertisers are identified. IAB members and survey participants receive a detailed report of the findings shortly after the release of the top-line data.

Founded in 1996, the IAB is dedicated to promoting the use and effectiveness of online advertising and helping advertisers and their agencies maximize the value of online marketing initiatives. IAB activities designed to foster the growth of online advertising include evaluation and recommendation of standards and practices for Internet advertising; sponsorship of research to document the effectiveness of the online medium; and the Internet Advertising Revenue Reporting Program.

Currently, the IAB represents more than 160 members including leading web sites and online services and the organizations that actively support advertising sales activities such as measurement companies, research suppliers, traffic companies, and technology and service providers.

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