Ad spending pops on the Net

Q1 is second record-breaking quarter in a row

HOLLYWOOD — The dot-com bust is officially over.

New figures from the Interactive Advertising Bureau show that online marketers spent a record $2.3 billion in the first quarter of this year, the highest figure on record.

It’s the second record-breaking quarter in a row after years of decline reaching back to the previous peak in the fourth quarter of 2000. It’s also a sign that the fourth quarter’s $2.2 billion wasn’t a holiday-related bump but part of an ongoing growth trend — making the Net one of the fastest-growing marketing mediums, though still much smaller in total size than competitors like TV.

“All through 2003 we published positive revenue results for Internet advertising and the trend continued through the first quarter of 2004,” said Tom Hyland, New Media Group chair of consultancy PricewaterhouseCoopers, which conducted the study.

Entertainment companies continue to account for a sizable piece of online marketing, spending 14%, or a little over $1 billion, of 2003’s $7.27 billion Internet advertising haul. That’s approximately the same percentage as in 2002, when entertainment companies spent around $900 million out of a total $6.01 billion.

Continued growth has also helped the bottom line for online media companies, with Yahoo!, Microsoft’s MSN and Google all recently revealing healthier profits thanks in part to Net advertising.

At its current pace, online marketing spending is poised to set a new record in 2004, besting the previous high of $8.2 billion set during the peak of the dot-com boom in 2000.