Online advertisers and marketers can rest on their laurels no more: A pair of surveys published earlier this week showed online advertising spending is not growing as fast as it has in the past — or as fast as it was expected to despite the dismal economy.
One report from the Interactive Advertising Bureau, based on a study conducted by PricewaterhouseCoopers, showed that while 2008 Internet advertising revenues totaled a record $23.4 billion — exceeding 2007’s performance by 10.6 percent — it was the slowest growth rate since 2002.
The 2008 figure compares with $21.2 billion in 2007, when online ad revenue grew 26 percent over 2006. The data suggests the recession is having a serious impact on one of the few drivers of robust growth in media and advertising.
Moreover, the road ahead will be even slower. Revised projections by eMarketer indicate that U.S. online ad spending growth will halve in 2009, with just a 4.5 percent increase, to $24.5 billion, compared with a previous prediction of 8.9 percent growth.
But David Hallerman, a senior analyst at eMarketer, looks at the figures and sees a glass half full. In an eMarketer article earlier this week, he said that in this economy, “it has to be considered good times when U.S. online ad spending reaches record highs, as it did in Q4 2008 at $6.1 billion and as it will in 2009 at $24.5 billion.”
In addition, some online ad formats are faring better than others, according to the IAB. Search advertising is holding up relatively well at $10.5 billion for 2008, which is up 19.8 percent over last year. Digital video, though still a small overall contributor, more than doubled its revenue with an increase to $734 million from $324 million in 2007.
E-mail held steady, accounting for 2 percent of all digital advertising spend in both 2008 and 2007. In 2007, actual e-mail advertising revenue was $244 million; in 2008, it rose to $405 million.
As in 2007, retail, financial services, computing and automotive remained the four largest verticals among Internet advertisers in 2008. Consumer packaged goods, an industry vertical historically slow to embrace interactive advertising, notably increased its share of total Internet ad revenues by 60 percent over 2007.