Online Advertising Still Growing, but Slower




Emarketer predicts that online advertising spending will reach $25.9 billion in 2008, up 23% from $21.1 billion in 2007. But what about online advertising revenue? IAB says online ad revenue was $5.9 billion in the 3rd quarter of 2008 – up 11.4%

It’s tough to compare the two figures without diving into metrics, but it doesn’t look rosy. Or, that the tough economy is hitting online too. What is clear is that revenues are going down and spending has slowed over the year.

Online advertising includes display advertising (banner ads, video ads, etc) and text-based advertising on search engines.

Anecdotal evidence I’ve heard and seen shows that businesses are still increasing their online budgets and moving print spend into more trackable online spend. This is based on what I have seen working at an SEO and PPC company where I work (OrangeSoda) and what I’ve heard from others in the industry.

A silver lining fromDavid Silverman, a partner at PricewaterhouseCoopers LLP, is that, “…the Internet should be better poised to withstand the storm given its ability to combine performance-based advertising along with broad-based branding.”

Online advertising revenues have been pretty much flat all year long. TechCrunch noted that the big three Google, Yahoo, and MSN have had almost flat growth. Annual growth rates for each of the past five quarters:
3Q07: 25.8%
4Q07: 24.3%
1Q08: 17.7%
2Q08: 12.8%
3Q08: 11.4%

I know I’m optimistic but even if growth rates slow, I don’t think we’ll see negative growth. If we do, I don’t see it being prolonged. I’d like to see if the growth rates are down across the advertising types, or if search is doing better or worse than other types of online ads.

  • http://www.newhomessection.com Jayson

    I agree that online advertising won’t decrease (if the economy permits); it is a little disheartening to see growth slow, but there’s not much growth anywhere…just a sign of the times I guess.

  • http://www.paystolivegreen.com go green

    That’s a good sign that internet marking will continue to grow. As Jayson said, the slow growth is probably due to the hard times we are facing financially as a country. Probably as things start to pick up, so will the marketing dollars.

    go green’s last blog post..Buy From Local Turkey Farms for Thanksgiving

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  • http://www.ownmine.com martha

    I’m totally agree with you. Some of my friends have their websites and they spend lots of money for their website but the output from the advertising happens not to be expecting…

  • http://www.greatpriceshere.com Nicole Price

    I too am in agreement. If anything, we should see increase.

    Nicole Price’s last blog post..The Best Recipe Sites

  • http://www.brickmarketing.com Nick Stamoulis

    It is going to be interesting to see what happens with online revenues for 2009. The economy does not seem to want to help us out right now.

  • http://www.livelifetothefullest.biz/wpblog Matt Helphrey

    Really discouraging numbers that is direct result of a poor economy. I really don’t foresee it dipping to negative #’s either. The internet is the future and the people connecting to the internet is rising. Advertising revenue may plateau but no way it does not rebound.

    Matt Helphrey’s last blog post..Creating a Home Based Business