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Internet Advertising Bureau Announces First Round Results of Ad Revenue Sales Reporting Program

Total Spending Reaches $157 Million Through 3Q of 1996

New York, NY – December 11, 1996 – The Internet Advertising Bureau (IAB) today announced first round results of its “Advertising Revenue Reporting Program,” with total spending reaching $157 million through the third quarter of 1996. 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. The survey is also the most inclusive report to date, encompassing all forms of Internet publishing including Web sites, commercial online services, off-line delivery services, and e-mail.

Over the past six months, Coopers & Lybrand’s Media and Entertainment Group has administered the “Advertising Revenue Reporting Program” which the association first announced at its premiere meeting last June. Data represents revenue across more than 200 Internet publishers. Of the total revenue figure, 85% reflects direct reporting. Advertising spending across the remaining 15% are conservative estimates derived from public information sources.

“Given the level of direct revenue reporting in this survey, these results represent the most authoritative and comprehensive measurement of actual spending in the online advertising industry,” said Rich LeFurgy, Acting Chairman for the IAB Steering Committee and Vice President of Advertising and Marketing for Starwave Corporation. “Until now, the industry has been uncertain as to the actual level of advertising spending. These survey results confirm that advertising on the Internet is real and growing.”

According to the survey, Internet advertising spending has grown steadily over the first three quarters of 1996. Total spending in Q1 was $29.9 million, Q2 posted $51.9 million, and Q3 posted $75.6 million. The data reveals a steady increase in ad spending from quarter to quarter, with a $22 million increase in spending from Q1 to Q2 and a $23.7 million jump from Q2 to Q3.

“With the support of the IAB, which has become a tremendous unifying force for the online advertising community, we have been able to develop a very powerful program for measuring this emerging industry,” said Tom Hyland, co-chair of the Coopers & Lybrand Media and Entertainment Group. “This will be an even more valuable tool moving forward, as trends are established and as even more members of the industry participate.”

Coopers & Lybrand will administer the program on an ongoing basis, with results released quarterly. Year-end 1996 results will be announced in early 1997. Future results will include measurement of ad spending by industry category.

Under the program, all data provided to Coopers & Lybrand is strictly confidential and is only reported in aggregate form. No individual Internet publishers or advertisers are identified.

Established in June of 1996, the IAB is comprised of more than 135 member companies dedicated to increasing the use and effectiveness of Internet advertising. These members include leading Web sites, consumer online services, marketing\statistical measurement organizations, research and traffic information suppliers, technology providers and other organizations from related industries.

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