Internet advertising revenues in Canada increased a whopping 516% in 1997 over 1996, jumping to $9.8 million from $1.6 million – a trend that’s expected to continue, according to the Internet Advertising Bureau of Canada.

IAB Canada is forecasting a revenue increase of 133% to $22.9 million in 1998 and another 148% leap to $56.9 million in 1999.

The industry group, which was formed last December, is basing its predictions on a research study conducted on its behalf by Ernst & Young.

The financial services sector was the biggest spender, according to the study, with more than $2 million of 1997 revenues – or one in five ad dollars – contributed by that industry.

After financial services, computing products and consumer goods were the next biggest spenders at $1.9 million each, followed by consumer services and new media at $1.2 million each.

Ted Boyd, vice-chairman of IAB Canada and vice-president of new media technologies at Young & Rubicam of Toronto, says over the last 18 months clients have started to look at Internet advertising as an important way to reach their target markets.

He says about a third of clients say they’re using the Internet because it combines the best of print, outdoor, tv and radio.

While banner ads accounted for $5.8 million or about 59% of industry revenues in 1997, Boyd says clickthrough (whereby Internet users click on a banner to get more information or link to the advertiser’s Web site) should not be the sole measure of success for Internet advertising.

‘I think it really depends on the objectives. There was a study published by the iab in the u.s. that indicated a significant increase in awareness just from people being exposed to banners.

‘Clickthrough is important if the objective of the campaign is simply to drive traffic or transactions,’ says Boyd, ‘but I don’t think this medium is different from any other when it comes to the effectiveness of branding.’

Boyd says he believes content sponsorship is going to become an increasingly important way to build brands through Internet advertising.

‘To own an area of content and to blend the message of a brand or organization with an area of content of interest to the target market is a very good way to advertise,’ says Boyd.

‘If you go back to the early days of television where large advertisers actually paid the ticket for the development of content with the GE Hour of Entertainment or Colgate Hour, in a sense that’s where we are again with this medium. You have the opportunity to create whole areas of content around a branded message… and people are actually prequalifying themselves when they go into that particular Web site.’

While Internet advertising appeals mainly to global advertisers, Boyd feels the technology is now advanced enough to make it viable for regional advertisers. He points to Web site networks like DoubleClick Canada and Clickthrough Interactive which are able to deliver a message specific to the surfer/reader’s geographic area.

Respondents for the iab study were selected from a list of 196 Canadian Web sites and narrowed to about 60 Web entities that were thought to generate meaningful advertising revenues.

A study covering the first two quarters of 1998 will be conducted in July.