ABSTRACT
The top six United States’ advertisers have been spending less than 1% of their budgets
on Internet advertisements, according to Morgan Stanley (Business Week, 2001).
Minimal spending on Web advertising may represent a shared feeling among advertisers
that the “Web is still a developing medium, with no firmly established standards for
either presenting advertising or measuring its effectiveness”. Skepticism that the Internet
is a viable advertising medium is probably underserved. The Internet audience has grown
rapidly. According to the Netratings 75% of American households are connected to the
Internet in 2004 (GreenSpan, 2004). (The Industry Standard, 2001). According to Nielsen
NetRatings, Internet users spend about 10 hours per month connected from home and 29
hours from offices. This audience is switching from the other media. Internet advertising
revenues in the United States in 2001 was more than 4 times the amount of outdoor adver-
tising ($8.2 billion vs. $1.8 billion) and nearly equaled spending on cable television ($11.2
billion) (Gibson 2003). This chapter addresses difficulties in defining Internet advertising and
measuring its effectiveness, issues likely faced by the other media when they first started.
