Online ad revenues soar

Online ad revenues soared to $214 million in the second quarter, a rise of about 313 percent over a year ago, the Internet Advertising Bureau reported today.

Monthly advertising reached $53 million in April, $70 million in May, and $91 million in June, and was up by $85 million in the second quarter compared with the previous quarter.

The IAB's survey also found that online advertising is leveling more evenly across the top 50 or so online publishers.

In the first quarter of 1997, for example, the top ten online publishers accounted for 63 percent of advertising revenues, compared with 69 percent in the second quarter.

"The second-quarter results are very exciting and show increased vitality, and the strongest numbers ever," said Rich LeFurgy, chairman of the IAB and senior vice president of advertising for ESPN/ABCNews Internet Ventures.

The survey, which contains data from more than 200 different Internet publishers that account for 90 percent of the industry's revenues, found that banners remain the predominant ad vehicle.

But the survey also found that sponsorship of online content has increased notably, capturing 41 percent of total revenues. Banner ads represent 54 percent.

The IAB's Revenue Reporting Program, which is administered by Coopers & Lybrand's New Media Group, found that the five leading industry categories continued to dominate Internet advertising during the second quarter: Consumer-related businesses accounted for 30 percent, financial services 22 percent, computing products 21 percent, and tied were new media and telecommunications, which each had 7 percent.

In the first quarter, consumer products captured only 17 percent of spending.

"I think the numbers are ramping up because more companies are moving out of the experimental level [of advertising online] and committing more investment," said LeFurgy.

The data for the IAB survey is compiled from data collected directly from companies engaged in selling advertising online--rather than projections or estimates.

The survey found that the vast majority of revenue transactions continue to be cash-based, with barter deals accounting for only 4 percent of total spending.