By Jeremy Schlosberg
 
     Thanks to a spurt of new web advertising-supported web sites sprouting in the last three months of 1999, the web has started 2000 poised to become a far larger advertising medium than might have been imagined even a year earlier.
   At the same time average CPM rates are stabilizing across all web site categories.
   At year-end 1999, there were 3,347 web sites and networks seeking advertising, according to a new report from AdKnowledge. This number was a startling 30.7 percent higher than it was even three months earlier, in September 1999.
    Over the course of the entire year, the number of web sites which could take advertising grew by 135 percent. Over the last two years, the web has grown as an ad medium by 233.7 percent.
     While the number of advertising-supported web sites has grown dramatically, the overall average banner ad CPM rates have stabilized, particularly in recent months, according to the report. 
     While CPM rates dropped by 6 percent over the course of 1998, the rate of decrease was 4 percent through 1999. In the last three months of 1999, the average CPM rate on the web overall dropped less than 1 percent.
    This is especially notable coming at the same time as such a sharp increase in the number of ad-supported sites on the web, attesting to a healthy level of demand and an increase in online ad spending.
    In the fourth quarter of 1998, by contrast, the average CPM rate dropped 3.2 percent. The average CPM rate by year-end ’99 was 9.2 percent less than it had been two years earlier.
     The major web category experiencing the largest drop in average CPM rates between Dec. ’98 and Dec. ’99 was computers and technology, which dropped from a web-high rate of about $45 to about $39. This leaves only two significant web categories with average CPM rates at or above $40: corporate web sites and professional publications.
    A year earlier, at year-end ’97, the average CPM rate at professional publication web sites was around $51.
    Sports is another category that has dropped significantly over the course of two years. At the end of 1997, average CPM rates for sports sites were the highest on the web at around $52. By the end of 1999, those rates had dipped to about $31.
    Two categories did experience a rise in average CPM rates between Dec. ’98 and Dec. ’99: shopping/transaction, which rose slightly from just under $30 to just over $30, and shareware, which rose from roughly $21 to about $26.