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Quantifying Online Ad Spending Phenomenon

According to eMarketer, it's time to compare the numbers. First the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) released the latest update of the "Advertising Revenue Report," which estimated U.S. Internet advertising revenue at over $4 billion for the second quarter of 2006.

Then the Online Publishers Association (OPA) reported that, according to an informal survey of its members, online advertising revenues will grow by 28 percent in the third quarter of 2006 compared to the third quarter of 2005. OPA members, including include About.com, Forbes.com and the Walt Disney Internet Group, said they continue to see strength across all online advertising categories.

Tomorrow eMarketer will release its "U.S. Online Ad Spending" report, which forecasts continued growth in online ad revenues, but at a slower rate in coming years. "We still see robust growth," says eMarketer CEO Geoff Ramsey, "but it is difficult for any industry to sustain a 30 percent-plus growth rate for three years in a row."

The new eMarketer report projects that US online ad spending will grow by 26.8 percent in 2006, reaching a total of just under $16 billion. Looking ahead to 2007, eMarketer projects that the growth rate will fall to a still healthy 15.1 percent. "The Internet will still be growing at a faster rate than television and most other media, but it's going to be coming back down to a sustainable level," Mr. Ramsey told Reuters.

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