Wednesday, April 1, 2009

eMarketer’s Online Ad Spending Forecast

APRIL 1, 2009

Recession-proof no more.

On Monday the Interactive Advertising Bureau (IAB) released its online advertising spending numbers for 2008.

For an advertising channel that many pundits had claimed—unlike its traditional counterparts, such as newspapers, magazines and television—was immune to the effects of the economic slowdown, the figures were not good news.

After years of soaring growth, online advertisers have started pumping the brakes.

The IAB report, based on a study conducted by PricewaterhouseCoopers (PwC), showed that online advertising growth was cut in half last year. US online advertising revenues grew only 11% in 2008 to $23.4 billion—the slowest rate of growth since 2002.

Moreover, the road ahead will be even slower.

According to eMarketer’s revised projections, released today, the rate of US online ad spending growth will halve again in 2009, falling to 4.5%.

As a result, eMarketer projects that in 2009 online ad spending will reach only $24.5 billion.

Previously, eMarketer had predicted an increase of 8.9% for 2009, with online ad spending reaching $25.7 billion.

David Hallerman, eMarketer senior analyst, does not look at the figures and see a glass half empty, however.

“Particularly in this economy, it has to be considered good times when US online ad spending reaches record highs,” says Mr. Hallerman, “as it did in Q4 2008 at $6.1 billion and as it will in 2009, at $24.5 billion.”

“Now that we've entered into the depths of the current recession, the Internet is emerging as one of the only bright spots in an otherwise decimated media landscape,” adds Geoff Ramsey, eMarketer CEO.

“It is true that the growth rate for interactive has slowed over the past 12 months, but marketers are continuing to migrate a greater percentage of their precious ad dollars toward the digital channel.”

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