Online Ad Spend to Shrink for First Time since 2001

March 2, 2009

This article is included in these additional categories:

Local & Directories / Small Biz | Media & Entertainment | Paid Search

US online ad spending in the first-quarter of 2009 will shrink year-over-year for the first time since the dot-com bubble burst in 2001, according to a recent forecast from IDC (via NetworkWorld).

In preliminary results, IDC said that US online ad spending was essentially flat in the fourth quarter of 2008. During that time, search ads increased 10% while display and classified ads – when compared with Q407 – fell 7% and 18%, respectively.

Though search ads did offset the poor performance of display ads and classifieds, the Q109 will likely see a slowdown in search ads, and display ads and classifieds will continue to plunge, according to IDC.

“All of this does not bode well for the current first quarter,” IDC said in a statement.

Though the company had previously forecasted 10% US online ad growth for 2009, IDC now believes that this expectations might be too optimistic. Now that IDC has evaluated the most recent Q408 information, it is considering revising its forecast downward in late March, pending Q109 results.

“We believe US internet advertising revenue could contract by as much as 5% in Q109 [compared with Q108],” IDC said, adding that spending will also likely shrink in the second quarter before the online market begins a slow recovery mid-year.

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