Online Ad Spending Reaches $1.92 Billion

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San Francisco -- Ad spending online in 1998 was $1.92 billion, more than doubling the $906.5 million advertisers spent on the Internet in 1997, the Internet Advertising Bureau reported at the ad:tech conference here yesterday.


Fourth quarter 1998 online ad revenue was $655.6 million, up $165 million over the same quarter last year.


The leading online spending categories for the fourth quarter of 1998 were consumer-related (29 percent), computing (20 percent), financial services (19 percent), telecom (8 percent), and new media (7 percent), according to the IAB report conducted by the New Media Group of PricewaterhouseCoopers.


Also, 93 percent of advertising transactions are cash based compared to 6 percent that are barter or trade and 1 percent that are package deals.


Also according to the report:


*Banner ads are the prodominant type of advertising on the Internet, accounting for 56 percent of online ad spending. Sponsorships account for 30 percent. Interstitials account for 5 percent. E-mail accounts for 1 percent of online ad spending.


*Hybrid (combination cost-per-thousand impressions and performance-based) deals dominate advertising tranactions in 1998 accounting for 54 percent. Straight CPM deals account for 40 percent of ad buys while performance-based deals were reported at six percent.
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