Companies selling consumer products and services are rapidly increasing their advertising expenditures on the Internet.

A new survey shows that overall advertising spending on more than 300 Web sites was up 80 percent to $359.4 million in the first quarter of 1999 compared with 1998.

Although computers and software, including online and Internet services, remain the top-spending category at $137.3 million, the fastest growth is coming in retail, where spending increased more than fivefold to $25.9 million, according to the report from Intermedia Advertising Services of New York.

The second-fastest-growing category was schools, camps, seminars, up 198 percent to $5.9 million, followed by government and organizations; beverages; and business and technology.

The survey found that advertisers increased the portion of their total ad budgets devoted to the Internet to 1.83 percent in the first quarter from 1.29 percent reported for the full year in 1998.

"The numbers clearly indicate that the Internet has become a viable advertising medium," said Joe Philport, president of Intermedia. "Over the past year, this has been increasingly supported by the consumer-products and service industries aggressively incorporating the Internet into their overall marketing mix."

Fastest-Growing Net Advertisers

Expenditures category, first quarter of 1999 compared with first quarter of 1998

Rank Industry Jan.-March 1999 Growth

1 Retail $25.9 million 534%

2 Schools, camps, seminars 5.9 million 198%

3 Government and organizations 4.9 million 180%

4 Beverages 1.2 million 164%

5 Business and technology 8.1 million 141%

6 Department stores 1.1 million 135%

7 Insurance and real estate 5.1 million 133%

8 Telecommunications 13.5 million 129%

9 Automotive dealers and services 1.6 million 127%

10 Medicine and proprietary remedies 2.6 million 123%

Top 10 total $69.9 million 217%