Online Adspend Soars by 43%, Set to Continue

22 September 2004

Internet advertising continues to increase, according to latest US figures from the Interactive Advertising Bureau, with first-half revenue showing a 40% rise from last year, up to $4.6 billion (€3.8bn; £2.6bn).

Second-quarter revenues hit an all-time high of $2.37bn (up by 43%) largely on the strength of consumer advertising, which accounted for half of all spending in Q2, rising from 35% in 2003.

Search-based advertising achieved 40% of revenue, the same as Q4 of 2003 but a massive 97% increase in absolute dollars compared with the same period last year. Its popularity stems from the fact that it is more targeted and that advertisers only pay when consumers click on ads, not when they view them.

Email advertising was hit by antispam laws and software, falling from 4% last year to just 2% in the second quarter.

Analysts such as Nate Elliott from Jupiter Research believe the rising trend of online ad revenue is set to continue, unlike the boom-bust experience: "This isn't the insane, irrational growth of the late '90s … these are hard-earned dollars."

Data sourced from: The Wall Street Journal Online; additional content by WARC staff