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Copyright 2000 Engage Inc. All rights reserved.

C O N T E N T S

P A G E

Introduction

1

The Report:

Section I: Number of Sites & Networks Seeking Advertising

2-3

Number of Sites & Networks Seeking Advertising

3

Section II: Advertising Rates

4-7

Overall CPM

5

CPM by Site & Network Category

6

Number of Sites & Networks and Average CPM

7

Section III: Creative Formats

8-10

Top 10 Banner Sizes

9

Format Acceptance by Media Type

10

Section IV: Focus Analyses

11-14

Rate of Conversions After Ad Views

12

Time Lag From View to Conversion vs. Click to Conversion Comparison

13

Percent of Conversions From Repeat Users

14

Section IV: Europe

15-16

Average U.S. CPM Rate vs Average European CPM Rate

16

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Copyright 2000 Engage Inc. All rights reserved.

INTRODUCTION

Online marketing is constantly evolving. Every single day, new media, new technologies – and
new challenges – come into play and change the overall picture. Amid all of this change, one
thing remains certain – standing still today may well mean being left behind tomorrow.

As the leading innovator in online marketing, Engage has the far-reaching insight and broad
expertise to help you stay one step ahead of the ever-changing Internet landscape. We
understand that knowledge is power. The Engage AdKnowledge Online Advertising Report is
one way we can put that power into your hands and help you meet and profit from each new
challenge like never before.

Subjects addressed in the Report include the status and trends of Web advertising in general.
The Report is published quarterly for the benefit of those involved in online advertising and is
available on our Web site at www.engage.com/adknowledge. The source of reported data is the
Engage AdKnowledge System. We believe the information to be both accurately reported and
meaningful to members of our industry. All data is aggregated. Advertising rates are as
reported on rate cards. The sites and networks in the System are representative of the Web
advertising marketplace. According to Nielsen//NetRatings, the Web-wide reach of those sites
and networks is 95.85% of the home audience and 98.42% of the work audience.

This Report is distributed at the sole discretion of Engage. The reprint or reuse of any portion
of its contents requires advance permission and source acknowledgement. Please address
comments or requests to:

Michele Schott
Director, Marketing
Engage
1808 Embarcadero Road
Palo Alto, California 94303

650-842-6502
[e-mail]

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SECTION I: NUMBER OF SITES & NETWORKS SEEKING ADVERTISING

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NUMBER OF SITES & NETWORKS SEEKING ADVERTISING

Source: AdKnowledge System

Key finding: The number of sites and networks seeking advertising continues to increase - 35% in Q3.

●

●

●

●

4586

5433

5953

6206

Jun-00

Jul-00

Aug-00

Sep-00

3000

4000

5000

6000

7000

Number of Sites & Networks

(as compiled in the AdKnowledge System)

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SECTION II: ADVERTISING RATES

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OVERALL CPM

Source: AdKnowledge System

Key finding: Average CPM rates continue to stabilize with a slight decline of 1% in Q3.

●

●

●

●

$34.06

$33.82

$33.63

$33.64

Jun-00

Jul-00

Aug-00

Sep-00

$32.00

$33.00

$34.00

$35.00

CPM

Average CPM (Rate Card) by Month

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Sports and Fitness

Special Interest

Society and Culture

Population/Segment

News and Media

Lifestyle

Health

Finance & Economy

Entertainment

Directories

Computers and Internet

Community

Business to Business

$0

$5

$10

$15

$20

$25

$30

$35

Site & Network Categories

Average Site & Network Category CPM (Rate Card - in US Dollars)

Jun-00

Sep-00

CPM BY SITE & NETWORK CATEGORY

Source: AdKnowledge System

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Copyright 2000 Engage Inc. All rights reserved.

NUMBER OF SITES & NETWORKS AND AVERAGE CPM

Source: AdKnowledge System

Key Finding: While the number of sites and networks selling advertising continues to grow, the
CPM rates have stabilized, signifying the maturing of the Web advertising industry.

4586

5433

$34.06

$33.63

$33.64 average CPM across sites & networks

Jun 00 Jul 00 Aug 00 Sep 00

5953

6206 sites/networks seeking advertising

$33.82

SECTION III: CREATIVE FORMATS

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Copyright 2000 Engage Inc. All rights reserved.

TOP 10 BANNER SIZES

Source: AdKnowledge System

468x60

125x125

120x60

234x60

120x90

88x31

392x72

460x55

460x60

480x60

120x240

0

200

400

600

800

1000

1200

1400

1600

Top 10 Banner Sizes

Number of Sites & Networks Accepting This Banner Size

Jun-00

Sep-00

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Copyright 2000 Engage Inc. All rights reserved.

RICH MEDIA FORMAT ACCEPTANCE BY MEDIA TYPE

Source: AdKnowledge System

Key finding: Each rich media format has continued to gain acceptance.

VRML

Video

V-Banner (by InterVu)

Superstitial (by Unicast)

Shockwave (by MacroMedia)

RealVideo (by RealNetworks)

RealAudio (by RealNetworks)

MicroSites (by Zapa)

Jump Page

HotMedia (by IBM)

Flash (by Macromedia)

Enliven (by @Home Network)

Emblaze (by Geo)

Cosmo Player (by Platinum Technology)

Comet Cursor (by Comet Systems)

AudioBase

Audio

ActiveAds (by ThinkingMedia)

JavaScript

Java

HTML (pulldown menus, forms)

0

100

200

300

400

500

600

700

Rich Media Ad Formats

Number of Sites & Networks Accepting This Format

Jun-00

Sep-00

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SECTION IV: Focus Analyses

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Copyright 2000 Engage Inc. All rights reserved.

RATE OF CONVERSIONS AFTER AD VIEWS

Source: AdKnowledge DataDNA

Key finding: Users who recently saw an ad have a higher propensity to convert, indicating a causal
relationship between the view and the conversion even when there is no click.

As stated in our Q1, 2000 OAR, 32% of all conversions happen after an ad view without a click.
This most recent study shows that these ad views can be correlated to the conversions.

Note: Conversions are actions defined by the advertiser, such as a purchase, registration, request for
information, etc.

0-29min

30-59min

1hr-24hr

1-7day(s)

8-30days

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Post-View Conversions per Minute (Indexed)

Increments of Time

1.00

0.46

0.03

0.02

0.01

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TIME LAG FROM VIEW TO CONVERSION VS CLICK TO CONVERSION COMPARISON

Source: AdKnowledge DataDNA

Key finding: Conversions from users who saw an ad without clicking are more spread out over time
than conversions from a click, signifying that view based conversions have more of a delayed
response.

Note:

1) The data used to demonstrate the time lag from click to conversion was taken from the Q2, 2000

OAR.

2) Conversions are actions defined by the advertiser, such as a purchase, registration, request for

information, etc.

0-29min

30-59min

1hr-24hr

1-7days

8-30days

0%

10%

20%

30%

40%

50%

60%

Conversion Rate

Average Time Lag

61%

11%

9%

4%

11%

13%

11%

34%

8%

38%

Time Lag From Click to Conversion

Time Lag From View to Conversion

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PERCENT OF CONVERSIONS FROM REPEAT USERS

% of users who converted at least once

% of conversions

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

74%

23%

3%

51%

34%

15%

1 time

2 to 4 times

5+ times

Users segmented by

# of conversions

Source: AdKnowledge DataDNA

Key finding: Marketers should concentrate on attracting loyal customers. While approximately 3/4
of customers acquired from ads only converted once, those who repeated accounted for nearly 1/2
of all conversions.

Note:

1) Conversions are actions defined by the advertiser, such as a purchase, registration, request for

information, etc.

2) Conversion activity was analyzed over a period of one to three months, depending upon the campaign.

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SECTION V: EUROPE

A D K N O W L E D G E e A N A L Y T I C S

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Copyright 2000 Engage Inc. All rights reserved.

AVERAGE U.S. CPM RATE VS AVERAGE EUROPEAN CPM RATE

US

Europe

$0

$5

$10

$15

$20

$25

$30

$35

Average CPM Rate (Rate Card) in US$ Dollars

Geographic Region

Sep-00

Jun-00

Source: AdKnowledge System

Key finding: Europe continues to demonstrate growth as the average CPM rate shows a slight
increase. CPM rates in the U.S. have leveled off.