December 16, 1996 6:00 PM ET
Internet ad spending topped $157M in first nine months of 1996
By Esther Shein

  NEW YORK--Companies spent $157.4 million advertising on the Internet in the first nine months of 1996, according to a joint survey by The Internet Advertising Bureau and Coopers & Lybrand L.L.P.

The survey was conducted among companies generating ad revenues of $5,000 or more per month and included more than 200 IAB and non-IAB members.

"This is the most accurate report of revenue on the Internet because it's using direct revenue data from advertisers,'' said Rich LeFurgy, acting chair of the IAB and vice president of advertising and product marketing for Starwave Corp., in Bellevue, Wash.

Unlike other studies, which have focused only on World Wide Web sites, the IAB/Coopers & Lybrand study looked at online, E-mail and newscast service companies as well, said LeFurgy.

Because the study was conducted on a confidential and anonymous basis, "these figures are grounded in reality," said LeFurgy.

The aggregate findings were announced here at last week's Internet World in New York.

More than 85 percent of the respondents reported revenues, while sales for the remaining 15 percent were based on conservative estimates of public information sources such as ad rate cards, according to Tom Hyland, co-chair of the Media and Entertainment Group at Coopers & Lybrand. Total spending broke down as follows: $29.9 million in the first quarter, $51.9 million in the second quarter and $75.6 million in the third quarter.

Although the IAB and Coopers & Lybrand didn't offer projections for 1997, they said they will continue to do benchmarking studies on ad revenues on a quarterly basis. The companies plan to release further findings next month on category spending and the amount of bartering that respondents reported.

In conjunction with the survey, the IAB and another trade association, the CASIE (Coalition for Advertising Supported Information & Entertainment), announced voluntary industry standards for Web banner advertising. The groups said the standards, which identify the eight most commonly accepted Web advertising banners, will help reduce the complexity of Internet advertising and create incentives for companies to spend more money online.

Currently there are about 250 different banner sizes, LeFurgy said.

"We think [the standards] will help unleash more money in media, because that money is now being spent on resizing banners,'' he said. "We also want to see more resources going into creative development of banners'' so they can be tailored for different target audiences, he added.

The IAB hopes this also will encourage more consumer companies to advertise on the Web, said LeFurgy.

The IAB was founded this past June to increase the use and effectiveness of Internet advertising. It has more than 135 member companies, including Web sites, consumer online services, marketing organizations, research and traffic information suppliers, and technology providers.

CASIE was founded in 1994 as a joint task force of the Association of National Advertisers Inc. and the American Association of Advertising Agencies to give consumers a wide range of interactive media options at an affordable cost.

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