The Internet is still at the bottom of the heap in terms of advertising dollars generated, but it closed in on outdoor advertising revenue, which totaled $1.4 billion in 1997. Rich LeFurgey, chairman and senior VP advertising of the Internet Advertising Bureau (IAB) said, "It's significant that Internet spending is showing up on the radar and growing faster than traditional media" (Maddox, 1998). Referring to the robust increase in the Internet advertising revenues, he added, "It is a phenomenal achievement considering how new the medium is. . . It indicates that consumer marketing companies are taking the medium seriously" (Maddox, 1999).

Since the first banner ad appeared on the HotWired Website in October 1994, advertising revenues on the Internet have showed a dramatic increase. According to the IAB, the fourth quarter advertising revenues on the Internet in 1996 were $109.5 million and the revenues for the first quarter of 1997 were $129.5 million, achieving an 18% increase over two quarters (Madox and Reidman, 1997). By the end of 1997, revenue reached $906.5 million (Maddox, 1998). Continuing to prove itself as a viable advertising medium, Internet advertising for the first half of 1998 had more than doubled over the same period in 1997 and excelled $1.3 billion for the first nine months of 1998. As of February 1999, according to the IAB Revenue Report conducted by the new media group of Price Waterhouse Coopers, the 1998 revenue was estimated to reach $2 billion (Maddox, 1999). Jupiter Communications predicts that Internet advertising revenue will grow to $3 billion in 1999 and $4.3 billion in 2000 (Maddox, 1998). By and large, the Internet has been established as a solid advertising medium.

As Internet advertising matures, the Internet advertising revenues are found to have some seasonality between quarters. In 1997, although first quarter ad revenues reflected continued growth in the still infant Web industry (18% increase), the increasing trend of the revenues has slowed down compared to the 45% jump in revenues between the third and fourth quarters in 1996. The first quarter slowdown was attributed to such factors as the traditional seasonal lag as well as decreased ad spending by some of the biggest Web advertisers (Maddox and Riedman, 1997). For instance, according to Jupiter Communications, AT&T Corp. cut spending 50% in February 1997 on the top 20 Websites and showed only a slight 13.9% spending increase on these sites in March 1997. On the other hand, other big Web advertisers with slow spending in the first quarter, such as Microsoft Corp. and IBM Corp., showed increase in the second quarter, said Jupiter Communications. IBM's Web ad spending on the top 20 sites was up 62% and Microsoft's was up 17.9% in April over March 1997. In 1998, the Internet advertising revenues showed healthy growth in the second and fourth quarters while slower increase in the first and third quarters. Tom Hyland, chairman of Price Waterhouse Coopers New Media Group, said that such seasonality in the Internet advertising signaled that "the medium is becoming more like traditional media" (Maddox, 1998).

Joe Philport, president of InterMedia said, "The most interesting thing is the growth of the direct marketing, retail, and service entities," pointing to increased ad spending by financial services, the second largest category spender following computers and software (Maddox, 1999). According to InterMedia, the top Internet advertisers for the first three quarters of 1998 were Microsoft Corp. ($25.5 million), IBM Corp. ($21 million), Excite ($8.8 million), General Motors Corp. ($8.2 million), and Inforseek Corp. ($7 million). The InterMedia's list of top 25 advertisers during this period shows the strong presence of the auto industry, which ranked sixth as an Internet category spender, including America Honda Motor Co. (No. 17 with $4.1 million) and Toyota Motor Sales USA (No. 22 with $3.7 million). On the other hand, in the IAB report, consumer-related ad spending (27% of total online spending) edged out computer-related spending (24%), followed by financial services (16%), telecom (11%) and new media (7%) for the third quarter of 1998 (Maddox, 1999). These data clearly demonstrate that the Internet has become a key part of overall marketing strategies among those top advertisers and industry classes.