US Online Advertising Seen Falling 5% This Year
After growing by 10% last year online advertising in the US is projected to fall 5%, according to media analyst Screen Digest.
“Online display advertising grew by ‘only’ eight percent for the full year, i.e. much lower than its previous growth of 26% in 2006 and 31 per cent in 2007. Screen Digest analysis has highlighted the very shocking four per cent year-on-year decline of Display advertising in the last quarter of 2008. The fall of the Display category would have been deeper had it not been for the growth of the online video format that nearly doubled in 2008. Screen Digest estimates that online video (pre-roll) ad sales reached $1.2m, up 64% over 2007.”
Search has remained much more dynamic than online Display in 2008 and, at least up to the third quarter, it seemed to be recession-proof, Screen Digest says. The format is highly accountable and scalable, while Display internet advertising, now a mature medium, suffers the same cost-per-thousand deflation affecting all other branding media.
“However, following the acceleration of economic recession in the fourth quarter, both formats have suffered: Search has seen growth rate halved whilst Display has experienced negative year-on-year quarterly growth for the first time since the dotcom crash of 2001-2002. Online Display, Search and Classifieds are also suffering from the particularly bad state of three critical client sectors: automotive, real estate and finance.”
Overall, the total internet advertising market will shrink by five percent (-4.8) in 2009 and only stabilize (+0.4 percent) in 2010.
Screen Digest now predicts that all categories and sub-categories except video will decline in 2009. Banner advertising (-8.8%) will not be fully compensated by the double digit growth of online video, so that the Display category will be down 3.6%. Search will shrink by two per cent and non-Display categories such as Classifieds will experience double digit falls.
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