Search Engine Advertising; The Catalyst of the Advertising Industry

Search: The Catalyst of Online Advertising
The rate of Internet advertising spending increased close to 50% during the second quarter of 2004 as compared to the second quarter of 2003 according to a report published by the IAB and PricewaterhouseCoopers.

Ad volume was estimated at $2.37 billion for the second quarter with spending topping $4.6 billion during the first half of 2004. According to the report, paid search engine advertising continues to be a catalyst for the online advertising industry, with almost 950 million spent during the quarter, accounting for 40 percent of all ad spending - up 29% from a year earlier.

Online Ad Spending By Format

	------Q2 2004------	-----Q2 2003------
	Ad Dollars (%/total)	Ad Dollars (%/total)

Search	$947 million (40%)	$481 million (29%)
Display Ads	$474 million (20%)	$382 million (23%)
Classifieds	$403 million (17%)	$282 million (17%)
Sponsorships	$213 million (9%)	$199 million (12%)
Rich Media*	$189 million (8%)	$149 million (9%)
E-Mail	$47 million (2%)	$66 million (4%)
Referrals	$47 million (2%)	$17 million (1%)
Slotting Fees	$47 million (2%)	$83 million (5%)

Source: Internet Advertising Revenue Report - Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers . In 2004, the "interstitial" format was combined within the "rich media" category. Dollar figures are rounded.