Online Advertising Spending Up Again

Online ad spending in the US totaled $2.37 billion in Q2 2004, according to the Interactive Advertising Bureau and PricewaterhouseCoopers

September 21, 2004

This represents an increase of 42.7% over spending in the second quarter of 2003, and a 6% increase since the Q1 2004 tally of (a revised) $2.23 billion. It is also the seventh consecutive quarter of growth for Internet advertising spending. For the first half of 2004, online ad spending totaled $4.6 billion, an increase of 39.7% from the first half of 2003.

Search has become an increasingly popular ad format in the last year, and now comprises 40% of the Internet advertising spending market, compared to 29% in Q2 2003. Pete Petrusky, Director of New Media at PricewaterhouseCoopers, attributes the growth in popularity of search to “its innate relevancy, the simplicity of the results and because advertisers can determine more precise response rates.”

Most ad format spending rose in absolute dollar terms from Q2 2003 to Q2 2004. One of the exceptions was e-mail, which refers to ads placed within e-mails devoted to other subjects, not e-mails sent out wholly as marketing. This format was most likely adversely affected by the backlash against spam, as was the overall e-mail marketing industry.

Breaking ad spending down by industry, spending by the consumer sector shot up as a percentage of the total, while computing and media spending shrunk slightly, financial service spending grew a bit, and pharmaceutical and healthcare spending remained the same.

For more in-depth analysis on the online advertising market in the US, read eMarketer’s “Ad Spending in the US: Online & Offline” report.

About eMarketer

By gathering the latest research and news from over 1,000 sources, eMarketer has established itself as the world’s leading provider of internet and e-business statistics. eMarketer’s Web site is at