Advertising on the Internet will grow at a compound annual rate of 76 percent between 1999 and 2004, bringing total online advertising revenue up from just $67 million in 1999 to $1.15 billion in 2004, according to a statement from the market research company.
The online segment only accounted for 0.05 percent of all advertising revenue in the region in 1999 but will grow as companies begin to recognize the value of advertising on the Internet. Advertising techniques will branch out from the traditional banner ad to more sophisticated techniques, such as site sponsorships, IDC said.
By 2004, the online segment will command an estimated 2.5 percent of total advertising expenditures in the region, approximately the percentage attributed to online advertising in the U.S. today, said Matthew McGarvey, who authored the report, in a telephone interview.
The advent of Internet content tailored to local languages and markets is fueling the growth of online advertising in the region, and a broadening of the market is also driving up ad revenue, McGarvey said.
"It's coming from traditional companies now moving their advertising online. As it is now, the only people advertising are banks, technology companies and other dot-coms," McGarvey said.
The report, based on surveys of Internet portals, advertising networks, and advertising agencies, does not take into account advertising for mobile Internet platforms such as Wireless Application Protocol (WAP), McGarvey said. A critical mass has yet to develop in that market, he said.
IDC is a subsidiary of International Data Group Inc., the parent company of the IDG News Service.