California-based advertising consultancy AdKnowledge released its second annual Online Advertising Report this week, with some interesting implications for e-commerce. Based on advertising statistics from more than 1,400 web sites, the “Year in Review” report concludes that e-commerce sites are fueling the growth of web advertising.
Some Rates Up, Some Rates Down While the average cost for online advertising has gone down, ad rates have actually gone up on sites that offer computer/technology content, and sites that offer online shopping. For the second year in a row, average cost-per-thousand (CPM) rates were down 6%. The average CPM went from $37.21 in December ’97 down to $35.13 by the end of ’98. According to Kevin Wandryk, vice president of marketing at AdKnowledge, we can “expect this downward trend to continue due to the ongoing rapid growth in the supply of online ad space.” However, in the case of online stores and computer/technology sites, ad space is limited and demand is high, so ad prices are expected to stay steady or increase. More Sites Seek Advertisers The report indicates that the number of web sites that sell ad space has increased 38% over the past year, rising from 1,033 sites in December 1997 to 1,424 in December 1998. Two of the fastest-growing categories of “ad-seeking” sites are classifieds and shopping/transactions. In fact, these two e-commerce oriented categories account for more than one third of the new sites established in 1998. And more advertisers seek online shoppers… “As one might have expected with all the pre-Christmas predictions of big e-commerce sales volume, advertisers flocked to the Web to attract shoppers,” Wandryk said. Other Interesting Findings:WebTV and Microsoft Made Big Progress The AdKnowledge “Year in Review” report also revealed exclusive statistics that show WebTV’s market share has tripled. When WebTV’s market share of 2.9% is combined with Microsoft Internet Explorer’s share of 47.8%, Microsoft now owns more than 50% of the browser market. Based on browser samples taken in October and November 1998, the report also found that Microsoft Internet Explorer had greater market share on the weekends at 53.3% than weekdays at 48.3%, indicating that more home-based Internet surfers use Internet Explorer than Netscape Navigator. Over the past year, Netscape’s browser market share continued to decline from 61% in December 1997 to 46.3% in December 1998. About AdKnowledge and the Online Advertising Report AdKnowledge supplies information from its Online Advertising Report to interactive agencies and marketers to help them optimize their web advertising campaigns. The 1998 Online Advertising “Year in Review” Report can be viewed online, free of charge, using Adobe Acrobat Reader. AdKnowledge is privately held, with headquarters in Palo Alto, California and offices in New York. The firm has alliances with other media measurement companies including BPA, Media Metrix, and Simmons.