INTERNET.

Ad revenues will continue to rise sharply as the medium evolves, and new ad forms and sponsorships develop.

Online advertising revenues are generally expected to keep soaring in 1999, ranging from $2.3 billion to nearly $3 billion, industry experts estimate.

Forrester Research foresees online ad revenues roughly doubling each year through 2000, with the rate of growth starting to slow down a bit after that in terms of absolute dollars. Relative to TV dollars, it's not big money yet, but it's growing fast from a paltry $550 million in ad revenues in 1997. Forrester estimates that Internet advertising will become a $2.3 billion U S industry this year, from $1.3 billion in 1998 It expects ad spending to go from $25 per person in 1998-double the rate spent m 1997-to $104 per Web surfer by 2003.

Jupiter Communications estimates 1998 Web ad revenues at $1.9 billion and projects a $2.9 billion ad market online in '99. The Internet Advertising Bureau basically agrees, pegging 1998 online ad revenues at about $2 billion, said Tom Hyland, chair, Price-waterhouse Coopers New Media Group (The IAB said it has no projection for 1999).

"Internet advertising is going to continue to grow You have many more people coming online and spending more time online," says Bill Bass, senior analyst for Forrester. He said the 1998 Christmas season will help prove that the Internet is fertile ground for retailers and other marketers. "Advertisers want to be as close to the point-of-sale as possible. As transactions shift online, that dramatically increases the value of online advertising".

But despite the robust state of the marketplace, Bass argues that the online landscape badly needs a makeover. For the most part, he said banner ads are becoming like so much wallpaper in cyberspace.

"Nobody remembers banner ads. They remember TV commercials," says Bass, who sees to a coming trend m more memorable ad devices.

The first blush of that is in so-called "pop-up ads" embedded in commercially oriented sites, such as special car company offers appearing in auto classified services online. And Forrester expects the automotive category will remain among the strongest online.

Gerry Boehme, senior vice president of strategy for Katz New Media, agrees that the current mode of Net advertising is fast becoming outmoded, and considers many banner ads "glorified outdoor" advertising Boehme believes the key to bringing Web advertising into the big time is to integrate it with more traditional on-air efforts. "A lot of the online advertising models are going to break down," says Boehme.

An opportunity exists for local TV stations that could sell links to advertisers on station sites, and encourage viewers to check those links out in on air promos, according to Boehme.

Evan Neufeld, Internet advertising analyst for Jupiter Communications, also anticipates the proliferation of integrated online-on-air media campaigns. And he also expects that an increasingly aggressive advertising environment online may reap the same consumer reaction registered to on-air ads in the past. "We're going to see more intrusive campaigns, Neufeld says, "and there'll be consumer backlash against full-screen, intrusive campaigns.

Forrester expects to see more advertisers buying into sponsorships online sponsoring proscribed content areas rather than simply posting their banners because banner ads just aren't generating click-through rates that justify current ad rates. "Sponsorships of a section is not a commodity," Forrester says.

"There's nothing you can compare that to," says Bill Bass. "But a banner ad is a banner ad is a banner ad".

Where banner ads do exist, Bass predicts we'll see more utility built in, citing the example of a recent Scope mouthwash promo, enabling PC users to send e-mail "kisses" in cyberspace.

Along with the automotive category, Forrester figures the hot categories online in '99 will include anything having to do with technology, and also financial services and telecommunications. "If you conceive of the Internet as an atomic explosion, there are some companies coming in at ground zero that are affected immediately,". Bass says, pointing to the growing popularity of shopping for stocks and cars online.

While commercial activity online continues to be centered in the U S 30% of Internet traffic now comes from abroad, with companies such as Yahoo and Amazon com now global brands. Forrester expects that to become an increasingly bigger part of the picture, with advertising from international sources to add $1 billion to the online pie by 2000.