Online advertising set to boom in 2003

Online advertising spending has been predicted to rise by almost 50 percent next year compared to 2002, according to reports.

After a worse than expected performance this year, the Internet industry is expected to benefit from a surge in online advertising revenue, media buying firm Initiative Media believes.

The pace of recovery in the Internet ad market is predicted to be much greater that the rest of the media sector, where some forecasters fear there will be little improvement in 2003.

"Online ad spending for 2002 was expected to be double 2001 levels but then the medium suffered badly along with all other media as a result of 9/11 and the general media recession," said Initiative in its latest annual advertising forecast, according to The Guardian on Friday.

"Recovery is expected in 2003 with the medium still in a healthy state. Advertisers are keen on seeing a return on their investment, especially during times of recession, and online's accountability helps ensure this," Initiative Media added, explaining that Web firms are usually able to supply advertisers with much more accurate statistics on the success of an ad campaign than other types of media.

Online advertising is still the lifeblood of so many Internet ventures, but its growth has trailed off considerably since the end of the dot-com boom, which saw the collapse of many of the medium's most active advertisers.

On Thursday the Interactive Advertising Bureau (IAB) -- an industry trade group that includes members such as MSN, AOL, Yahoo! and ZDNet's parent company CNET Networks -- endorsed a new set of ad sizes that are larger than standard Web banners.

This "Universal Ad Package" includes a new large ad size, as well as three sizes the bureau had previously recommended, which occupy broad space on a Web page. By promoting a uniform set of on-the-page ad sizes, the IAB hopes to simplify the buying and creative development process for agencies and advertisers, thereby mirroring mature markets such as print and TV.

Last month, the IAB also announced plans to double the size of the UK's online advertising market to £300m by 2004.

CNET News.com's Stefanie Olsen contributed to this report

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