Internet advertising turnover hits $21-25m

A new Business Data Israel (BDI) report notes a 45-55% rise in Internet advertising from 2002-2003, and expects growth to continue in 2004.

The data indicate impressive growth, noted BDI economists, mainly in light of the fact that 2003 was considered a bad year for the Israeli advertising sector, in which expenditure on advertising declined by 6%. BDI believes that Internet advertising revenue will continue to grow by an additional 25-30% in 2004, to $28-32 million.

However, Internet advertising represents only 2-3% of the total expenditure on advertising in Israel. BDI believes that in light of expanding Internet use due to broadband, and steadily rising numbers of surfers, the rate of expenditure on Internet advertising relative to other advertising media could grow significantly in the coming years.

The data further reveal that over half of Internet advertising budgets go to banner ads, which represent 50-55% of all Internet ad revenue. Following far behind in second place was site promotion via search engines, which represented 18-22%. In third place were such rich media solutions as Pop-up and floating ads, with 15-20%. Fourth place was taken by sponsorships, with 7-11% of the total Internet advertising pie.

The five leading Israeli websites are Walla!, MSN Israel, Y-net, Nana, and Tapuz, which collectively gain over 70% of total Internet advertising revenue. Israel's other portals and business sites have less than 30%.

Walla! is by far the biggest in terms of advertising revenue, with an estimated market share of 25-29% of all Internet advertising revenue. Y-net takes second place with 17-21%; MSN places third with 13-17%; Nana - 11-15%; and Tapuz - 6-10%.

Published by Globes [online] - www.globes.co.il - on Tuesday, June 22, 2004