The pace of online advertising is accelerating - up 67 percent from last quarter, or a whopping 313 percent from the same time last year, according to the latest figures from the Internet Advertising Bureau. Meanwhile, the rates charged for those ads are showing signs of falling closer to Earth as competition between a growing number of publishers heats up.
Internet advertising revenues totaled US$214.4 million in the second quarter of 1997 - up a substantial $85 million from the first quarter of 1997, or $162 million from the year-ago quarter. The growth is notable on a month-to-month basis, with revenues jumping up from $53.4 million in April to $70.3 million in May, and $90.7 million in June, the IAB concluded, based on its quarterly survey of some 90 percent of Web-site publishers that bring in at least $5,000 monthly in ad revenue.
The report offers evidence of a "ramping up of more and more advertisers coming onto the Web," said Rich Le Furghy, IAB chairman and senior vice president of advertising at ESPN/ABC News Internet Ventures. "We're starting to see advertisers come out of the experimental mode and into the committed mode," he added.
At the same time, a lot more sites are being published that are of interest to advertisers - and they are bringing down the cost per thousand impressions, according to the most recent monthly report by Focalink, a Palo Alto, California, company that facilitates ad sales in part by trying to match buyers with sellers on its MarketMatch site.
The average CPM charged by weather sites, for example, has dropped 16 percent - from $38.29 in August to $32.27 in September - while the number of sites in the category shot up by 29 percent, Focalink reported. Game sites saw their average CPMs drop 15 percent over the same 30-day period, from $44.86 to $38.41, while the number of sites grew by 5 percent.
"It's sort of basic supply and demand," said Susan Lutter, spokeswoman for Focalink, explaining the falling prices. "But we weren't sure if the Web would obey basic economics."
