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Online Advertising Bounces Back as Animations Increase

Online advertising rebounded in 2003, according to a new industry report, which cites growth in ad spending by Fortune 500 companies and growing market share for animated advertising for which marketers pay a premium.

The report, to be released today, also cites data released in mid-February by the Interactive Advertising Bureau and PricewaterhouseCoopers estimating that online advertising revenue in the United States increased 20 percent in 2003, to $7.2 billion. In the fourth quarter alone, online ad spending was $2.2 billion, a 38 percent increase over the same quarter a year earlier.

"There is irrefutable evidence that 2003 was a major recovery year for online advertising," said Charles Buchwalter, a vice president at Nielsen/NetRatings, an Internet audience measurement company that collaborated on the report with DoubleClick, a New York company that provides online advertising technology to publishers and marketers.

"The single most significant industry development for the online space," Mr. Buchwalter said, "was the fact that larger traditional advertisers have expanded their focus on the Web."

The number of online advertisements sponsored by the automotive industry increased 75 percent in 2003, according to Nielsen/NetRatings, while online advertisements by the telecommunications companies increased 31 percent.

Over all, the number of online advertisements delivered in 2003 increased 4 percent, reaching 1.09 trillion impressions. An impression is a single appearance of an ad on a user's computer screen. Although Mr. Buchwalter acknowledged that 4 percent was not overwhelming growth, he said the fact that spending increased 20 percent indicated a healthy market.

He also pointed to a more than 200 percent increase during 2003 in the use of so-called rich media advertisements - ads using animation, audio, video or other interactive elements - which accounted for 17 percent of online ads last year.

"The largest, most traditional advertisers are the ones who have adopted that rich media format first," Mr. Buchwalter said, explaining that the growing use of high-speed Internet connections had made it more feasible for traditional companies to use video and animation in their online campaigns.

Posted on aef.com: March 4, 2004


Susan Stellin, The New York Times. March 1, 2004

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