US Internet Ad Revenue Falls 12% In 2001

Online spend for 2001 totalled $7.2 billion, according to the PricewaterhouseCoopers-produced report. The IAB says that the weak revenues were not unexpected and that they mirror the experiences of the broader advertising market. “In fact, the internet ad results compare favourably to many other, more established ad sectors, which experienced steeper declines during the reporting period,” it says.

The IAB cites figures from other forecasters that show how online is outperforming other media. CMR, Jack Myers Report and McCann Erickson, for example, put US broadcast TV down 11.8%, 12.0% and 13.8% respectively for 2001. National spot radio decreased by 20.4% according to CMR and 19.4% according to McCann, it says.

In March CMR reported that US online spend fell by 14.7% in 2001 (see US Online Spend Drops 14.7% In 2001, Recovery Predicted By Q3 2002).

Sole 2000 comparison ‘a mistake’ “We believe that in assessing the results of internet advertising in 2001, it would be a mistake to limit the comparison to the results for 2000, the banner year for all advertising sectors,” said Greg Stuart, President & CEO of the IAB.

“The industry fundamentals – growing installed base of internet users, more attractive demographics, and higher accountability – are firmly entrenched, enabling it to more than hold its own through its first acid test of a slow ad market. What is important now is how we improve the medium and the actions we take to help the industry rebound.”

However, the latest data from CMR, covering Q1 2002, show internet revenue down by 14.2%, with weaker performances coming only from cable TV and syndicated TV (see Slight US Advertising Rise In Q1, Signs Of Further Slow Recovery).

The IAB and PWC are to start publishing top-line reports for the first and third quarters; the Q1 2002 will be announced shortly.

Consumer leads web advertising In 2001, the consumer-targeted category continued to be the largest overall segment for online advertising (30%) with the retail segment (50%) driving these ad revenues.

Ad formats Percentage use of various ad formats remained fairly consistent in 2001. Formats tracked and their respective share of 2000 and 2001 full year revenue are shown here.

“The top three ad formats – banners, sponsorships and classifieds – still account for the lion’s share of industry revenue. The slight decline in classifieds partly reflects continued weakness in the job market, and was partially offset by growth in auction-based listings,” said Peter Petrusky, director of PricewaterhouseCoopers New Media Group.