But then Jupiter Executive Vice President Marty Levin peeled back layers of charts to show the audience that those projections were wrong.
According to his first statistical analysis, Levin said online advertising was expected to grow at close to 40 percent for the year. But then he showed that, factoring out "house ads"--those for properties owned by the host site (for example, an ad for Yahoo Finance on Yahoo)--the line flattens out to around 30 percent growth.
The line drops even more when you consider anecdotal evidence, Levin said.
Advertisers are actually selling ads at much lower prices than their rate cards dictate, he said; he's managed to aggregate some of those unofficial numbers though confidential conversations with clients. The result is a slightly jagged line for 2001 that eventually flatlines.
The bottom line: Jupiter Media Metrix now sees online ad spending of $5.7 billion this year, down from its previous forecast of $7.3 billion.
But perhaps those more conservative estimates aren't conservative enough. On Friday, Lehman Brothers analyst Holly Becker called most estimates for online advertising "overly optimistic."
"The ad industry remains in great turmoil, and it is now obvious that a second-half recovery is likely not in the cards," she said, adding that "AOL will make up over 50 percent of the market in 2001."
Becker said most independent research firms now call for growth of around 22 percent this year. According to her "bottom up" analysis, however, the online ad industry will decline by almost 7 percent this year to around $5.44 billion.
Becker, who made her name by being the antidote to overly optimistic Internet analysts, set her sights Friday on forecasting firms such as Jupiter Media Metrix, Forrester Research and IDC.
Her biggest beef with the forecasting firms is that their long-term forecasts are too optimistic, betting on a list of expected cure-alls, including e-mail marketing, strong growth in non-technology clients and the ever-imminent bandwidth explosion.
The Lehman analyst does agree with these companies that online ad spending will bounce back. Her long-term growth estimate is 20 to 25 percent for 2004, when she expects the industry to bring in $10 billion. Jupiter Media Metrix is projecting the market will have about $10.6 billion in revenue in 2004.
"Traditional advertisers just haven't spent as much as we thought they would," said Jupiter Senior Analyst Patrick Keane, in explanation of the firm's sudden revision to estimates. In an interview this week, Keane said Jupiter is "being more conservative" now, but added that it has been "dead on" with forecasts for the past few years.
Despite this new caution, Jupiter's long-range forecasts for ad spending are still strong. It predicts spending to be over $15 billion by 2006. For 2005, the company did cut its estimate to $12.9 billion from $16.5 billion.
Living up to the forecasts
At Jupiter's conference Wednesday, analysts cited a trend towards domination of ad dollars by key players such as Yahoo and AOL Time Warner, and talked about the factors that will supposedly help the industry live up to those bullish forecasts.
Key trends cited at the conference include an increasing share of ad revenue from the automobile and travel industries, which, unlike technology companies, aren't being hit by the economic downturn. Technology companies were the earliest adopters, but now that offline companies are starting to "get" online advertising, their share of the revenue pie is expected to rise, analysts said.
E-mail marketing was also touted as a big revenue driver. In a presentation entitled "What's Working Best in Online Marketing Today?" DoubleClick CEO Kevin Ryan said his company's use of e-mail marketing is expected to increase fourfold this year.
On the cautionary side, Jupiter analysts warned that the phenomenon of "site-specific" ads, such as BMW's film series, which drew Internet users to a site for films featuring its cars, could cause a problem for publishers since it lets advertisers bypass the middleman.
The coming bandwidth explosion, a long-cited panacea for the industry's woes that will allow TV-like ads on the Web, was also mentioned at the conference, but in much more cautious terms than in the past.
"Bandwidth is something we plan for, but we'll put those numbers away in a black box for now," Keane said.