Ad Spending Down, Use of Larger Ads Increases

Online ad spending dropped 14.7 percent in 2001 from 2000, according to CMRi.

Using its AdNetTrackUS database, CMRi estimates that online ad spending for 2001 totaled $2.5 billion. Auction giant eBay surpassed General Motors, which has long been the top company for online ad spending, in 2001 by spending $45.1 million online to GM’s $43.3 million.

Despite the drop from 2000 to 2001, David Peeler, president and CEO of CMR, said he does see better news coming in the future.

“With the year 2002 already showing signs of improvement, we’re expecting to see an upswing in spending by third quarter,” Peeler said. “In fact, CMR estimates that Internet spending will lead the way in 2002, in terms of significant growth, up 8.8 percent from its 2001 total. With subtle signs of recovery on the horizon, the industry awaits the economy’s stabilization, and then we’re hopeful to see advertising revenues reach more positive levels.”

The top sectors for online ad spending in 2001 were Retail ($533.3 million) and Media and Advertising ($450.5 million). Yahoo held on to its position as the top property for online advertising revenue with more than $344 million for the year.

Top Sites by Online Ad Revenue
Site 2001
Yahoo $344,023,858 $319,966,842
Excite $126,839,443
Lycos $111,071,976
Netscape $108,045,556
AltaVista $77,584,031
WebCrawler $57,455,361 $44,115,749
MSN $33,638,416 $31,813,112
Source: CMRi

Meanwhile, according to research from Jupiter Media Metrix, the larger online ad units introduced last spring by the Interactive Advertising Bureau are continuing to gain traction despite a slow start.

A year after the New York-based IAB introduced the standardized skyscraper ad, the so-called “medium rectangle” and “large rectangle,” Jupiter said the new formats comprise about 9 percent of all online ad placements. That’s more than double the 4 percent industry adoption that Jupiter’s AdRelevance unit uncovered a month after the unit’s introduction, in April 2001.

In terms of impressions, Jupiter said large-format ads saw a 185 percent increase in impressions, from 2.0 billion to 5.7 billion, during the same period — suggesting that not only are more publishers using the format, but that they’re placing the ads in high-trafficked areas of the site.

That makes sense, since the largeness of the units (and their related suitability for TV-like rich media) often commands higher fees from advertisers.

“The past year has shown that while taking time to catch on, the IAB benefited online advertisers and publishers by recommending standards for larger formats,” said Charles Buchwalter, vice president of media research at Jupiter.

Among the large ad types, skyscrapers seem to be growing the most quickly, increasing 436 percent since April. One reason for this could be the relative ease with which they are integrated into site content: replacing the narrow “vertical banner” comes more easily to publishers than ceding a large, continuous chunk of online real estate to a rectangle.

Despite large formats’ growth, the banner ad continues to dominate the online ad scene, making up about half of all online ad placements. Banner impressions grew 39 percent, from 23.6 billion impressions to 32.9 billion.

Smaller ads, such as buttons and bars, also saw a 15 percent growth rate in impressions (from 20.6 billion to 23.7 billion.) However, the smaller formats’ collective share among all online ads dropped from 46 percent to 38 percent.

“It is doubtful that the demise of smaller ad formats is anywhere near on the horizon, but experimentation is moving in other directions,” Buchwalter said.

Popularity of Key Online Ad Sizes
Paid Online Impressions (billions)
Month Small
Banners Squares &
Skyscrapers Combined
Large Ads**
Jan. 2001 16.9 18.9 0.7 0.2 0.9
Feb. 2001 17.0 20.7 0.8 0.2 1.0
March 2001 21.8 25.3 1.1 0.4 1.5
April 2001
(IAB introduces
large ad standards)
20.6 23.6 1.4 0.6 2.0
May 2001 21.5 26.3 1.1 0.9 2.0
June 2001 23.3 26.8 1.6 1.3 2.9
July 2001 21.1 27.1 1.7 1.5 3.1
Aug. 2001 21.5 28.0 2.0 1.9 3.9
Sept. 2001 24.4 28.8 2.0 1.9 3.9
Oct. 2001 24.1 29.8 1.6 2.8 4.6
Nov. 2001 24.6 32.2 1.8 2.8 5.9
Dec. 2001 26.4 35.4 3.1 2.8 5.9
Jan. 2002 23.7 32.9 2.5 3.1 5.6
Change Jan. 01
vs. Jan. 02
40% 74% 251% 1835% 542%
Change April 01
vs. Jan. 02
15% 39% 80% 436% 185%
* Bars & buttons
** Squares, rectangles and skyscrapers combined

Source: Jupiter Media Metrix

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