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Second Quarter 1999 Online Ad Revenues Soar To Nearly $1 Billion

Industry Revenues More Than Double for the Second Quarter and the First Six Months Of 1999

New York, November 3, 1999 – Online advertising soared in the second quarter of 1999 with revenues growing to $934.4 million, according to the Internet Advertising Bureau’s (IAB) Internet Ad Revenue Report. Conducted independently by the New Media Group of PricewaterhouseCoopers, for the IAB, the second quarter and first six-month results OF 1999 ARE more than double the same periods for 1998. Underscoring the unabated vitality of the medium, consumer advertising continues its strong growth signifying increased advertiser confidence and consumer acceptance, while hybrid pricing schemes continue to account for over half of the revenues reported. The report was released today at the Internet Advertising Bureau’s Annual Membership Meeting being held in conjunction with @d:tech in New York City.

“This growth is obviously extremely significant for our industry and very clearly demonstrates the strength of the medium as it attracts increasingly larger segments of clients’ ad budgets,” noted IAB Chairman Rich LeFurgy. “The continued strength across all categories again underscores the Internet’s ability to collapse and streamline the business cycle for advertising, marketing and branding initiatives, making it more and more attractive for traditional advertisers. It should also be noted that as we continue to double revenues, we are doubling larger and larger numbers, making these increases even more significant.”

Commenting on the report, Tom Hyland, Chair, PricewaterhouseCoopers New Media Group noted; “To put this report in perspective we need only to go back four short years to 1996, when we reported the full year’s ad revenue at $267 million. The industry has come a long way in that time due in no small part to all segments of the industry realizing that the is the most important part of the equation.”

The categories which lead online spending during the second quarter were: Consumer-related (29%), Computing (22%), Financial Services (20%), Business Services (9%), and Telecom (6%). The report also found that the overwhelming number of revenue transactions, (93%) continue to be cash-based with barter/trade and packaged deals accounting for 6% and 1% of total revenues respectively. Banner advertisements continue to be reported as the predominate type of advertising, up slightly this quarter and accounting for 59%, with sponsorships (28%), interstitials (4%), email (1%), with all others at 8%. When looking at pricing models, hybrid pricing accounted for 52% of 1999 first quarter revenues, with CPMs or impression-based deals at 41% and performance-based deals at 7% of revenues.

Conducted by the New Media Group of PricewaterhouseCoopers on an ongoing basis, with results released quarterly, the “Advertising Revenue Report” was started by the IAB in 1996, and represents data from more than 200 companies representing over 1500 Web sites. The results reported are the most accurate measurement of online advertising revenues since 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.

PricewaterhouseCoopers (, the world’s largest professional services organization, helps its clients build value, manage risk and improve their performance. The PricewaterhouseCoopers New Media Group — with offices in New York, Los Angeles, Seattle, San Francisco Bay Area, and Boston — combines content and technology specialists to provide comprehensive service to dynamic entrepreneurial companies. Services include management consulting, business assurance services, ad delivery and privacy attestation and consultation, assistance with mergers and acquisitions, tax planning and compliance, capital structuring and employee benefits and executive compensation packages.

Drawing on the talents of more than 150,000 people in 150 countries, PricewaterhouseCoopers provides a full range of business advisory services to leading global, national and local companies and to public institutions. These services include audit, accounting and tax advice; management, information technology, strategic and human resource consulting; financial advisory services including mergers & acquisitions, business recovery, project finance and litigation support; business process outsourcing services; and legal services through a global network of affiliated law firms.

Founded in 1996, the IAB is the leading online advertising association with over 300 active members. Its activities include evaluating and recommending standards and practices, fielding research to document the effectiveness of the online medium and educating the advertising industry about the use of online advertising. Current membership includes companies that are actively engaged in the sales of Internet advertising, with associate membership including companies that support advertising, — interactive advertising agencies, measurement companies, research suppliers, technology suppliers, traffic companies and other organizations from related industries. A global organization, IAB member countries include Belgium, Canada, France, Germany, Holland, Italy, Switzerland and the United Kingdom, and is currently developing membership countries in Asia and Latin America, as well as other countries in Europe. The IAB and the Internet Local Advertising & Commerce Association (ILAC) agreed to combine their organizations in July of 1998.


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