Last updated on November 28, 2001

Internet Advertising

Internet Advertising is here to stay like those annoying billboards on the side of the road. Don't get me wrong, I know that they are needed and advertising is good for the economy and the consumer. It just seems hard to imagine anything without some sort of corporate sponsorship stamped and tattooed all over it. In fact, the only place that I can't remember seeing corporate advertising of any kind was at church. However, it's been quite some time since I've been there therefore this information may not be up to date.

A major contributor of such an explosion of retail and advertising on the Net is the fact that the number of people that have access to the Internet has grown exponentially and it keeps growing daily. So why all the hype? Because the Internet pays. Here are some numbers to take into account when thinking about the enormous effect the internet has had, not only in the advertising world but also in the economy and our society:

  • The Internet is growing faster than all other technologies that have preceded it. Radio existed 38 years before it had 50 million listeners, and television took 13 years to reach that mark. The Internet crossed the line in four years.
  • In 1994, a mere three million people were connected to the Internet. By the end of 1998, more than 100 million worldwide were using it, including 62 million Americans. Other estimates have put that number slightly lower, at 49 million Americans.
  • The nformation technology industry is growing twice as fast as the overall economy. Without information technology, inflation in 1997 would have been 3.1 percent, instead of the 2 percent it was.

In 1995 when the Internet was not as highly recognized as is today, advertising totaled $312 million. Online ad revenues grew to $4.62 billion in 1999, a 141% increase from 1998, according to the Internet Advertising Bureau: http://www.iab.net .
The portion of online advertising spent on email marketing continues to increase. Though it accounted for 2% of online ad spending for all of 1999, in the fourth quarter it made up 3% of the total. In contrast, the share of spending directed to banner ads is declining. Banner ads accounted for 56% of spending for the entire year, but 53% of spending in the fourth quarter. The remaining types of 1999 Internet advertising and their percentages of total spending for 1999 are: sponsorships, 27%; interstitials, 4%; and other, 11%.

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