Web advertising spend leaps ahead

But researchers continue to fight over the figures

Businesses spent $423 million on Web-hosted advertising in the second quarter of 1998, a year-on-year increase of 97 per cent, the Internet Advertising Bureau (IAB) has reported. The IAB also said it expects 1998's overall Web advertising revenue to reach $2 billion. However, Forrester Research analyst Chris Charron reckons the IAB's overall revenue figure to be wide of the mark. Forrester's own calculations suggest companies will spend something closer to $1.3 billion. The IAB's chairman, Rick LeFurgy, was quick to damn this apparent criticism of his organisation's research. "I'm perplexed, confused and not clear why people continue to think this data does not reflect the marketplace," he complained on ZDNN. "We do not associate with the advertisers, we don't report what sites are doing what, we have no incentive to fudge the numbers." LeFurgy is nevertheless being just a mite disingenuous here. The IAB is a consortium of many of the largest US emedia players, the very people who make money from selling Web advertising space. There's no evidence to suggest they've banded together to generate false data -- which is what LeFurgy's comment suggests he thinks the IAB's critics are implying -- but clearly they would all prefer the numbers to paint a more optimistic picture of the market. After all, all the IAB -- and Forrester, too, for that matter -- can do is ask as many companies as possible (200 in the IAB's case) how much money they made from advertising, and then factor that figure across the commercial Web as a whole. Any statistical process like this is open to slight systemmatic error. It's why people who take their numbers really seriously -- physicists, mathematicians and their ilk -- always quote the estimated error attached to their results. So, it's reasonable to say Web advertising will have generated around $1.6 billion by the end of the year. That's still a tidy sum in anyone's books, even if it is still less than one per cent of the entire ad spend of the world's businesses. Interestingly, on 95 per cent of ads are actually paid for -- the remaining five per cent are placed on a barter basis. Again, anecdotal evidence suggests the figure may be higher than that. ® Click for more stories Click for story index

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