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Internet Advertising Booms In First Half Of 2004

Internet advertising revenues for the first six months of 2004 were approximately $4.6 billion - a 39.7 percent increase over the first half of 2003, according to the Interactive Advertising Bureau. Internet advertising revenue totaled approximately $2.37 billion for the second quarter, up 42.7 percent over same period last year.

"Internet Advertising is without question taking share from the other media at this time and for good reason - marketers have figured out that online advertising is often the most cost effective medium for influencing both branding and sales results," said Greg Stuart, president and CEO of the bureau. Stuart added, "This data is fuelled by recent public announcements that online ad budgets are dramatically increasing, for instance approximately 25% is going online for Ford's Lincoln Mercury and approximately 50% for Vonage."

Pete Petrusky, director, new media, PricewaterhouseCoopers, commented, "Not surprisingly, search continues its popularity, and has been embraced by advertisers due to its innate relevancy, the simplicity of the results and because advertisers can determine more precise response rates. In addition, for the first time in a number of years, we see a 25% growth rate collectively in Rich Media and Display Advertising."

Tom Hyland, chairman of PricewaterhouseCoopers New Media Group, said the industry has been experimenting with different formats since the beginning. He added, "While search has been the strongest format recently, we think that evolution process will continue.

"In fact, as broadband begins to reach critical mass in the home we think the number of traditional advertisers with branding objectives will further increase as it provides a better platform for more compelling media ads and video formats."

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More Information:

"Surveying the Digital Future" is a new study by UCLA to gather reliable information on the impact of digital PC/Internet technology on our society for policy makers, business leaders and academics. The data and analysis that will come from this study is expected to strongly govern how companies will make basic business and marketing decisions from the beginning of the project through much of the 21st century. Surveying 2096 representative households throughout America, the study is available in its entirety in PDF format for complete review. Excerpts from the Executive Study are included here...

- More than 2/3 of Americans have some type of access to the Internet

- 51.7% have purchased online

- 8.9% of purchasers by online weekly

- 28.5% of purchasers shop monthly

- 4.5% of all Internet users are responsible for 31.4% of all online purchases

- 21.5% of purchasers spend under $15; 59.8% spend $15-175; 18.7% spend over $175

- Respondents say convenience is most important, followed by saving time and availability of information about goods and services.

- Purchasers do not think there is a price advantage over traditional retail stores

- 2/3 of purchasers say that online buying has somewhat reduced their purchasing at retail stores

- 91.2% of Internet users are somewhat concerned or very concerned about credit card security

- 42% of Americans us e-mail daily

- Satisfaction with the Internet gets a rating of 4.0 on a scale of 5

- Only 54.7% of users and 1/3 of non-users believe that most of the information is reliable and accurate

- Individual privacy raises the greatest concern. 63.6% believe it "...puts privacy at risk."

- 41.4% of non-users are likely to access the Internet in the next year

- 1/3 of non-users are "not interested."

- 16.8% of non-users "would not purchase a computer at any price."

- Adults say that children's grades are not affected (by time spent online), and it does not cause "social isolation."

- 47.1% use the Internet with other household members

- Internet users watch 28% (4.6 hours per week) less television than non-users

- Respondents say the Internet is still emerging as a tool that can create more political power

- 67.3% of users consider the Internet to be an important or extremely important source of information. 53.1% and 46.8% rank television and radio similarly

- 48.6% of users say their email is monitored by employers

- 53.3% of students use the Internet at school

****Did you know... The projected number of Internet users will catapult from 8.5 million in 1995 to 320 million in 2003! (Forrester Research ) By year-end 2000, the number of online shoppers in the U.S. grew to 48 million. (eMarketer) Online sales reached $40 billion last year and will jump to $41 billion in 2003. (MediaMetrix)

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