Burst!

Burst! Releases Internet Cash Advertising Report to Web Publishers

URLINGTON, Mass., April 27, 1998 --In an effort to provide enhanced services to its 1600+ Web publishers, BURST! – a Web rep firm located in Burlington, Massachusetts – conducted a proprietary analysis of advertising spending on the Internet. While other industry analyses report ad spending based on barter, value-added services, rate-card pricing, gross spending, long-term strategic partnering, and cash spending, the BURST! Internet Cash Advertising Report focuses exclusively on cash spending by advertisers – a measure of Internet advertising most meaningful to the independent Web publisher. By this measure, the total cash spent on Internet advertising in 1997 was calculated to be $336 million.

“We felt that we had no choice but to undertake our own industry analysis.” says BURST! CEO Jarvis Coffin, “Every decision we make addresses the interests of our most important customer – the Web publisher. We feel it is crucial for them to understand the rate of out-of-pocket ad spending on the Internet. This not only helps us manage our customer relationships, but it also helps the Web publisher predict ad revenue growth, set budgets, and manage the expectations of investors, managers, employees and customers.”

The BURST! Internet Cash Advertising Report was compiled by combining publicly available information with information obtained through interviews with privately owned companies. When information was unavailable, estimates were made with no attempt to totally eliminate intra-industry ad spending and check swaps which inflates actual out-of-pocket expenditures.

Summary of Findings:

Table 1: (millions)

Year	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Totals
1996	$16.6	$23.3	32.5	$47.3	$119.7
1997	$53.6	$64.3	$89.7	$128.4	$336.0

Fourth Quarter 1997

 For the fourth quarter of 1997, BURST! calculates cash spending on the Internet at $128.4mm, up 172% from fourth quarter last year.
 Search Engines account for 53% of totals add spending in the quarter, down from 56% for the same period last year.
 The top 20 Web sites (as determined by advertising revenue) received 94% of all ad dollars, as compared to 97% during the fourth quarter of 1996.

Full Year 1997

 For the full year, BURST! calculates cash spending on the Internet at $336mm, up 181% from 1996.
 Search Engines account for 54% of total ad spending, up from 49% for last year.
 The top 20 Web sites received 95% of all ad spending, as compared to 97% during 1996. “

"It’s not a billion dollars, but it is still very good news. It is almost unbelievable.” says Coffin, “Remember it took cable 6 years after they started to attract advertisers, before they did $337 million in ad sales (the year was 1983). On the Internet, we passed that hurdle in just our 3rd year. That makes the Internet the fastest growing media industry in history.” Over 1/2 of the cash dollars spent on Internet advertising in 1997 went to Search Engines, and almost all the cash spending was limited to a small group of sites. Yet the CEO of BURST! is not concerned, “We believe as advertising budgets become more meaningful, they will undergo more scrutiny. At that point, people will become less enthusiastic about advertising on search engines and more excited about advertising on the Internet.”

Even with a modest allowance for inflated cash ad spending, BURST!’s Internet Cash Advertising Report indicates that real spending by advertisers on the Internet is less than one-half of one percent of the total ad spending across all measured media ($185 Billion). For BURST!, this realization is tantamount to managing the expectations of their customer – the Web publisher. Estimating that cash ad spending won’t reach $1 Billion on the Internet until the year 2000, BURST! uses the Internet Cash Advertising Report to inform its Web publishers so that they can control the cost side of their business, and seek creative sources of revenue besides advertising.

Internet Cash Advertising Forecasts

 1998, $560mm (+75%)
 1999, $839mm (+50%)
 2000, $1,259mm (+50%)
 2001, $1,637mm (+30%)
 2002, $2,128mm (+30%)

While total ad spending is less than many people perceive it to be, the numbers are still meaningful. At expected rates of increase, long term forecasts show Internet cash ad spending reaching $1.2 Billion by the year 2000, and more than $2 Billion by 2002. With such predicted growth, it is likely that resources will be available to evaluate and purchase a broader set of online advertising opportunities.

BURST! represents and supports the vital business and creative interests of Web publishers. Offering customized advertising solutions and effective inventory-management technology, BURST! provides Web publishers with the resources needed to offer specialty content on the World Wide Web. BURST! was founded in 1995 , and is a privately held company headquartered in Burlington, Massachusetts – with offices in New York City and San Francisco. Information about BURST! can be obtained on the Internet at www.burstmedia.com or by calling 781-272-5544 Ext. 245.