Online Ad Revenue Soars in Canada

Online advertising in Canada continues to soar according to the 1998 Ernst & Young Internet Advertising Survey. Findings indicate that 1998 first-half revenues equal $8 million (US dollars), while revenue for all of 1998 is projected at $20.7 million. The survey findings indicate that industry revenues in 1999 will increase by 82 percent, to $37.7 million.

“Revenues will continue to build as media buyers become more comfortable with using the Internet as a complementary advertising vehicle alongside the more traditional advertising approaches,” says Miles Faulkner, partner, Ernst & Young Management Consultants’ NetCommerce Solutions team.

These estimates come from the second of the semi-annual surveys that Ernst & Young conducts on Internet advertising for the Internet Adverting Bureau of Canada (IAB Canada). IAB Canada comprises Internet advertising and marketing professionals dedicated to bringing structure and standards to the industry.

The study also presents evidence that the Internet is maturing and gaining acceptance by advertising agencies. In 1998, advertising agencies were the source of $12 million of Canadian Internet advertising revenues. This represents 58 percent of total 1998 advertising revenues, compared to 44 percent in the 1997 Year-End Survey.

“The rapid growth and acceptance of the Internet into our day-to-day lives has created a new buying channel,” says Dr. Stephen Tanny, Ernst & Young Management Consultants’ chief economist. “This in turn has prompted advertisers and marketers to adopt more strategic use of the Internet, so the surge in revenues represents successful interaction between sellers, advertisers and consumers.”

First-half results for 1998 show banner advertising as the top Internet advertising product at $5.3 million. “The surge in the share of banners can be explained primarily by the increased acceptance that banners are the best way to create brand awareness on the Internet,” says Faulkner.

The findings came from a survey of the 73 Web “entities” believed to generate the majority of Internet advertising revenue in Canada.

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