Online advertising to reach $2 billion

A new study says online ad revenue will explode with the growth of the Web.

Fed mainly by ad-supported Web sites, online advertising revenue will approach $2 billion by the millenium, according to a new Simba Information study.

Total spending on online advertising will shoot up to nearly $2 billion by the year 2000, up from the $200 million that will be spent this year, according to Simba. The figure will still represent less than 1 percent of the $221 billion spending projected for the total advertising market in 2000, including print, television, and outdoor media.

The increase in revenue will partly be a function of the increase in people looking at those pages. The Simba study also reported that the number of page views, or times a person actually looks at a given page, will jump from 1.65 billion in 1995 to 94.8 billion in 2000.

Online services that require paid membership such as America Online now account for about half of all online advertising revenue. But the Simba study projects that public Web-based advertising will become the dominant source of revenue in the next four years as proprietary online services abandon their private domains in favor of the Internet.

Of the four major services only AOL plans to retain its existing proprietary format, while CompuServe, Prodigy, and Microsoft Network are all slowly shifting their content on HTML-based Web pages.

Related stories:
AOL launches new ad program
Online entertainment still trails TV

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