Internet advertising set for '02 rebound.(Brief Article)(Statistical Data Included)

Internet advertising will pick up in the middle of next year, according to a comprehensive new media-industry forecast released last month. In fact, over the next four years, ad spending online is expected to grow at a solid 5 percent compound annual growth rate, rising to $225 billion by 2005, the report says.

The 369-page forecast from New York-based media merchant bank Veronis Suhler is a kind of state of the state report on all communications media, including the consumer Internet.

Leo Kivijarv, the bank's director of publications, said that part of Veronis' projections are based on historical trends. If the current economic slowdown -- Veronis does not use the word "recession" -- follows old trends, Kivijarv said, online ad spending is certain to bounce back next year.

"The year after advertising takes a big hit, it seems to catch up quicker than expected and have a larger growth than normal," Kivijarv said. "That's why we're so bullish about the entire advertising industry growing at 6.9 percent go forward into 2002."

That figure includes all forms of advertising, he said. Internet spending alone is projected to rise 8.1 percent in 2001, though it will moderate in later years during the company's five-year projection period.

The compound annual growth rate of Internet advertising is expected to settle in at 3.8 percent between 2001-2005, the report says.

The report goes into great depth on Internet trends during the year 2000, which was marked by massive financial losses and layoffs among Internet companies, beginning with the stock-market plunge of April 14. Many online business failures, especially those among e-commerce sites and free Internet service providers, were blamed on the collapse of ad spending that began in the third quarter of 2000, and continued into 2001.