Even after a very strong third quarter, web advertising shot up again during the final quarter of 2003.
   Preliminary figures released yesterday by the Interactive Advertising Bureau, in a report conducted by PricewaterhouseCoopers, put fourth-quarter revenues at a record $2.2 billion, even higher than the $2.12 billion set during fourth-quarter 2000, when the dot.com bubble reached its peak.
   The figure marked a 38 percent improvement on fourth quarter 2002’s $1.58 billion. Spending was up 26 percent over a preliminary estimate for third quarter 2003 of $1.745 billion.
   That brought internet ad revenue to $7.2 billion for the entire year, up 20 percent over last year but 11 percent behind the 2000 peak of $8.09 billion. Final 2003 results will be released in April.
   IAB and PricewaterhouseCoopers estimate the numbers by surveying the top 15 online ad sellers. These companies generally account for more than 80 percent of industry totals, and the IAB extrapolates the total industry figures based on them.
   The names of these companies are not released, although it’s not hard to guess who some of them are. America Online, Yahoo and Microsoft’s MSN are the top web brands, according to Nielsen//NetRatings. 
   There are several reasons for the big boom, chief among them the continued rise of paid search listings. Paid search is the hottest category in internet advertising right now. Advertisers love the ability to target surfers according to what they’re looking for, whether it’s on Google or a more specialized search engine.
   According to numbers compiled by eMarketer, paid search grew 300 percent during the first half of 2003, sparking 10 percent overall growth. It increased by 123 percent total in 2003.
    Another hot growth area is rich media, which is expected to become more popular as broadband growth continues.
   Paid search will account for 32.5 percent of online advertising next year, eMarketer predicts, nearly double the projection for rich media and 8.5 percent percentage points ahead of banner ads.
   Another factor spurring online ad spending is the strong results from several of the larger internet companies, especially in the second half of the year. Yahoo, MSN and CBS Marketwatch all reported revenue hikes of at least 40 percent for fourth quarter.
   The only big company still mired in the dot.com burst is America Online, whose ad revenue declined 40 percent this year and is down 65 percent from two years ago.
   Take away AOL and net spending growth would be even greater.
   Finally, the overall improvement in the economy is being reflected very quickly online, which crashed three and a half years ago. 
   Greater acceptance of the internet and the greater financial stability of the remaining ad-supported sites account for the medium's growing acceptance by mainstream advertisers. It also explains why web advertising is widely expected to outpace most off-line media in growth over the coming several years.