Technology | Media | Telecommunications

Saturday, December 13, 2008

Online Advertising Outlook for U.S. Market


There's more bad news about the economy every day, and falling advertising spending is part of the mix. Although online advertising is still on a positive growth curve, that growth is slowing and will dip into the single digits for the first time in 2009.

eMarketer’s revised projection, benchmarked against the latest Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) data, puts online ad spending at $25.7 billion in 2009. That is only 8.9 percent over the $23.6 billion that will be spent in 2008.

In August, before the full impact of the economic slowdown was revealed, eMarketer predicted online advert spending would grow 14.5 percent in 2009.

Not only is the new projection lower, but recovery is expected to take longer. In 2010, online ad spending growth will return -- but only barely -- into the double digits at 10.9 percent, and in 2013 it will only hit 13.5 percent.

Even paid search, which has grown at an outsize pace for years, will see a mere 21.4 percent rise in spending this year.

Again, the slowing is relative, since paid search spending growth will still outstrip the overall online market through 2009. There's a reason paid search will stay robust through the economic downturn, according to David Hallerman, senior analyst at eMarketer.

"Especially in economic turmoil, search is more trackable than any other ad format," said Hallerman. "At this stage, it is a tried-and-true format that is supporting online growth."

Two key data points are particularly noteworthy, the forward-looking decline in e-mail ad growth and the dramatic increased growth of video related advertising.