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Internet ad revenues in the US at $5.95b in 2002

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NEW YORK: A slump in e-revenues in the United States was on the cards post the dotcom bust. A study conducted by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers showed that ad revenue in the United States was $5.95 billion in 2002 (down 17 per cent from 2001).

The study is based on data from the top 15 online ad sellers, which account for 80 per cent of online ad sales. The results of this revenue compilation are then extrapolated to calculate the total industry revenue figure.

The study also proved that Internet ad revenue fell by 9.8 per cent to $1.5 billion for the fourth-quarter 2002. However, Internet ad revenue rose 2.3 per cent in the fourth quarter from the third, the IAB reported.

IAB president and CEO Greg Stuart reasoned that the few predominant factors which contributed to the [year-over-year] revenue decline included the conclusion of some long-term advertising deals. He, however, added that the majority of online publishers continued to remain profitable and their revenues continue to rise year-over-year.

The increase in the fourth quarter Internet advertising revenue in the US reflected the first consecutive quarterly increase since the second quarter of 2000.

IAB's Stuart was also quoted as saying: “The improved online advertising environment reflects a confluence of factors The publishers are offering a more manageable, uniform and understandable business proposition than ever before. The creative side has gotten smarter and is delivering compelling, entertaining content, which will only improve as the installed base of high-speed access users increases. This adds up to a fertile environment for the industry to right and propel itself.”

“The improved performance over the past two quarters reflects a stabilising online advertising market, highlighted by continued strength in paid-for-search results. The recent upturn, coupled with forecasts of continued expansion of broadband distribution, bodes well for a strong year in 2003” said PricewaterhouseCoopers New Media group chairman Tom Hyland in a statement.

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