eMarketer's New eAdvertising Report: U.S. Web Ad Spending Will Increase To $6 Billion By Year End 2000
Source: eMarketer

• U.S. Web Ad Spending Will Increase To $6 Billion By Year End From $3.6 Billion In 1999
• The Online Market Will Rise To $21 Billion by 2004
• Large Percentage Growth Online Will Still Only Represent 4.7% of Total Ad Media Spending by 2003

U.S. web advertising spending more than doubled in 1999 to 3.6 billion, up from 1.7 billion in 1998. This same trend will follow through to year-end 2000 when advertising spending will increase by 69% to reach a high of $6 billion, according to eMarketer’s eAdvertising Report. The report also reveals that the online market will rise to $21 billion by 2004, 3.5 times its size this year.

The report, by New York-based eMarketer, also reveals that active Latin American internet users in the region will equal 5% of the 372 million users worldwide by 2003. The report also reveals that although these numbers indicate that the Latin American user base may be big enough to create a lucrative market, it will not challenge the North American or European regions for a very long time.

"My conclusion from these numbers is that this thing is really booming," said the report’s author, Senior Analyst David Halprin. "Internet advertising really is something that potentially will be more effective advertising than anything the world has ever known."

Halprin also adds that many research analysts have upwardly revised their ad revenue projections. According to the eAdvertising Report, composite 1999 online and ad revenue projections from about 15 researchers were $2.6 billion in January 1999, $3.1 billion in December 1999 and $3.6 billion in April 2000.

Despite tremendous growth of online advertising over the past two years, the eAdvertising report indicates that the advancements will slow as the as the industry stabilizes and future trends become more established.

Growth in on-line advertising will be affected by the following trends:

• Advertisers and their agencies will continue to tinker with critical issues such as measurement, standards, ROI and privacy
• Web advertising will be embraced by large consumer marketing companies and attain a more strategic position within corporate marketing budgets
• Online advertisers will continue their struggle to achieve a measurable return on investment

  Key Findings of eAdvertising Report:

• The US dominance of online ad spending, like user penetration rates and e-commerce development, is slipping. Europe is the next frontier, with 9% of global web expenditures in 1999 and rising to 18% by 2004
• The banner ad is still the standard advertising form on the web, accounting for 50% of all online dollars placed in 1999. By the end of 2003 banners will decline to 41% of web ad sales, with strategic sponsorships taking 30%.
• By year-end 1999, the top 10 publisher sites accounted for 74% of ad dollars earned, and by year-end 2000 this figure will reach 76%. Currently, the top 50 web publishers generate 95% of all web revenues.
• General portal sites will capture only 34% of web advertising dollars by 2004
• Savvy web advertisers will exploit new techniques and technologies to drive direct response and achieve ROI.