Online Ad Spending Grows 10%; Video Ads Strong (Just Not at Google)

Tuesday, March 31st, 2009 by Andy Beal

Online Ad Spending Grows 10%; Video Ads Strong (Just Not at Google)

In yesterday’s report, we informed you of the dramatic decline the newspaper industry is seeing in advertising revenue. Perhaps the most shocking revelation was that newspapers saw a 1.8% decline in online advertising revenues. You might have downplayed that decline due to the overall decline of online spending. However, new data from the Interactive Advertising Bureau, in conjunction with PriceWaterhouseCoopers, reveals growth of just over 10% in online ad spending.

Web ad spending hit $23.4 billion in 2008, up 10.6 percent over 2007. Fourth quarter 2008 revenue growth was more conservative at 2.6 percent; total online ad spending for the quarter was $6.1 billion.

While that 10.6% growth is down from the whopping 26% growth seen in 2007, it’s still pretty darn good–and shines a bright spotlight on just how badly the newspaper business is doing with its migration to online formats.

Breaking down online ad growth, we see that search grew 20% and performance-based ads rocked the house with an impressive 57% share of all ad spending.

I’ll leave you with one stat that left me scratching my head

[David Silverman, partner at PriceWaterhouseCoopers] cited video ad spending as a significant growth category. Video advertising revenue rose from 2 percent in 2007 to 3 percent of overall online ad spending in 2008.

So why did Google just shut down its video ad units?

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8 comments on “Online Ad Spending Grows 10%; Video Ads Strong (Just Not at Google)”

BoomTownCasinoBiloxi Says:

March 31st, 2009 at 11:08 am

Thanks for the stats… good info
Esearchclick Says:

March 31st, 2009 at 12:39 pm

Online advertising industry is growing trmendously and have brighter future than any other media’s.
Michael Martinez Says:

March 31st, 2009 at 1:50 pm

I’d like to know why Google is shutting down the video ad units, too. People are saying too few publishers signed up with the service. I only started running video ad units last fall, after my regular AdSense revenues dropped off. The video ad units have replaced nearly all my lost income and now represent about 1/3 of total AdSense revenue.

This decision just makes no sense.
Barbara Ling, Virtual Coach Says:

March 31st, 2009 at 2:55 pm

I would agree about wondering where Google’s next step would be – everywhere I look there’s articles about video marketing which I really have to teach myself. Things are evolving quicker than ever….

Barbara Ling, Virtual Coach’s last blog post..What Profit Personality Are YOU?
Charles Neville Says:

March 31st, 2009 at 6:25 pm

Given Google’s market dominance, and the fact that they all but set the prices, and have a reputation for turning the dial at will, couldn’t these figures just be interpreted as ‘this is how much Google decided to make’?

Charles Neville’s last blog post..Using sex to sell
Twitter Today: April 1, 2009 | kenneth lim . net Says:

April 1st, 2009 at 10:55 am

[...] Online advertising spending grows 10% (Via: @stejules) [...]
SEO Company Says:

April 2nd, 2009 at 10:09 pm

Thanks
Losing Hope, Banishing Fear and Following Ad Dollars to the Web « Future Perfect Publishing Says:

April 7th, 2009 at 2:12 pm

[...] in the advertising and marketing world about the future of online video as an ad medium. More and more dollars are moving into online advertising; but the pace has slowed somewhat and television is still dominates ad spending. Just as it took [...]

Marketing Pilgrim