May 02, 2005
IAB: 2004 Web Ad Sales Up 33 Percent
Advertisers increased spending on Web advertising by 33 percent in 2004, according to a new compilation of the industry's revenue.
The Interactive Advertising Bureau, the main trade group for the Internet ad industry, said total Web ad spending hit $9.6 billion in 2004, up from $7.3 billion in 2003 and above the $8.1 billion level reached in 2000 at the height of the dot-com boom.
The IAB study, done by PricewaterhouseCoopers, found increased spending in all categories, led by a 50 percent increase in search advertising spending to $3.9 billion. Display advertising spending was $3.8 billion, up 17 percent.
Campaigns are eligible that use at least three distinct communication channels, including both traditional and non-traditional media. There is no limit in terms of the number of communication channels used and the length of the execution.
"It's a very healthy environment," said Pete Petrusky, director of advisory services for PricewaterhouseCoopers. "The industry is obviously doing well, especially vis a vis other ad segments."
The IAB found consumer advertisers, including automobile and retail companies, sharply increased their spending online, devoting $4.7 billion to Internet ads in 2004, a 74 percent increase from 2003. Other areas with spending spikes were financial services and pharmaceuticals. Financial services companies spent $1.6 billion online in 2004, up 82 percent; pharma and healthcare businesses spent $576 million on Internet ads, nearly double that spent a year earlier.
Petrusky said broadband adoption, which is estimated in 50 million U.S. households, has hit a level where advertisers would begin to move more money into branding ads. "The fact that broadband is in home more offers advertisers a platform for richer formats," he said.
