Reports of the death of online advertising have been greatly exaggerated, to march out the hoariest of clichés, one that surely has Mark Twain twirling in his grave for having invented it in an off moment of bluster.
   Never mind that dot.coms are failing by the dozens and that any number of individual web sites may be suffering from a dearth of advertising revenue.
    Truth is, online advertising is thriving. So reports AdRelevance, the online ad tracking outfit.
   Ad impressions on the web were up 21 percent in December over November and reached an all-time high, says AdRelevance.
    More important, web ad dollars are now being spread over a far wider array of web sites than they were even a year ago.  
   In December some 69 sites together accounted for 80 percent of ad revenue, according to AdRelevance.
   Just a year earlier, in December 1999,  only 17 web sites accounted for 80 percent of online ad revenue. 
    This latter statistic led many observers to predict at the time that ad dollars would grow increasingly concentrated on fewer and fewer web sites. In one well-publicized report late last summer, one Lehman Brothers securities analyst more or less handed most of the web’s ad revenues of the future to two online entities—America Online and Yahoo.
    The new AdRelevance data shows that prediction to be not just premature but wrong-headed.
     The new report points out yet another trend that speaks to the mainstreaming of the web as an ad medium: The number of advertisers spending significantly online is also growing.
   In December 1999, 57 advertisers accounted for 50 percent of all ad spending on the web, according to AdRelevance. By December 2000, 80 advertisers accounted for 50 percent of ad spending, representing a 40 percent increase.
    This trend refutes another Wall Street presumption of second-half 1999 that fewer and fewer advertisers were destined to dominate the web.
    AdRelevance further reports that these 80 advertisers are still a negligible percentage of the total number of online advertisers, which the measurement firm places at about 12,000 now.
    From this, AdRelevance analysts anticipate great growth potential as in the near future advertisers that were merely testing the waters online start spending more freely on the web.
   The report also notes that as of December, 43 percent of all advertisers on the web were not dot.coms—up from 32 percent the previous December. 
   At this rate the number of offline brands advertising online will soon outnumber the online brands, which is another sign of increasing rather than decreasing robustness for the online advertising industry.
   The top web site ranked by ad revenue for the month of December was MSN, according to the report. MSN took in some $180 million in ad revenue in December, compared to No. 2 Yahoo’s $118 million (see chart).
   AdRelevance data, however, does not include numbers from America Online’s proprietary online service, which has more than 25 million subscribing members.
   Even so, MSN appears to be a largely undiscussed force to be reckoned with.
    In addition to being No. 1 in ad revenue, it also seems to be earning far more per advertiser than other web sites—some $430,000 per advertiser in December, compared to $105,000 per advertiser for Yahoo and Netscape.
   The top advertiser on the web for December was Amazon.com, spending some $61.8 million for the month—far ahead of No. 2 Barnesandnoble.com, at $23.6 million (see chart).
    The new report also illustrates how volatile the web is.
    Only two advertisers in the web’s top 15 from December 1999 remained in the top 15 in December 2000—ETrade and eBay. On the other hand, six of December 2000’s top 15 were not even in December 1999’s top 100.

-Jeremy Schlosberg is the senior editor for new media.

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