Look out: US online advertising seen down 5 percent

April 9, 2009

From the bearish forecast department: Screen Digest, a media research firm, issued an outlook today predicting¬†a 5 percent decline in online advertising in 2009. Folks, we’re not talking about newspapers or network television or radio here. We’re talking about the Web.

Screen Digest put out the forecast in response to the IAB’s recent report on 2008, which showed Web advertising rose 10 percent. But the number that turned heads over at Screen Digest was IAB’s fourth quarter figure, which put online growth at a mere 2.6 percent.

Here’s what Screen Digest says:

Following the fourth quarter 2008 tipping-point, Screen Digest has revised its 2009-2010 forecasts for online advertising in the US. We now predict that all categories and subcategories except video will decline in 2009. Banner advertising (-8.8 per cent) will not be fully compensated by the double digit growth of online video, so that the Display category will be down 3.6 per cent. Search will shrink by two per cent and non-Display categories such as Classifieds will experience double digit falls. Overall, the total internet advertising market will shrink by five per cent (-4.8) in 2009 and only stabilize (+0.4 per cent) in 2010.

Still, some perspective… Screen Digest figures that even with a slump in Web advertising, it will still fare better than the broader market. It seen total US advertising spending down in double-digits this year, and some areas (like local TV) dropping by up to 20 percent.

Keep an eye on:

  • Boston Globe employees reacted with a mix of resignation and anger on learning of the pay and benefit cuts and the lost job security that The New York Times Company wants them to accept as the price of keeping the money-losing Globe in business (NY Times)
  • Nintendo Co Ltd said sales of its Wii game console have lost some steam in Japan, but it aims to boost demand again by launching a new version of its blockbuster “Wii Sports” software in June (Reuters)
  • Three months after Democratic Presidential contender Barack Obama took the White House, Fox News is beating its rival cable news networks, General Electric Co’s MSNBC and Time Warner Inc’s CNN in the ratings game (Reuters)

(Photo: Reuters)


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In 1920 majority of shareholders sold their stake in Ford because they insisted the auto industry had reached its peak. Maybe they were right in light of the events with the Big 3 recently.

Many are saying that Online Advertising has reached its peak already.

Major trends follow the S-curve where it takes 50% of the time to reach 10% of the market and the same amount of time to reach 90%.

With that logic, online advertising is now at 8-9% of all marketing budgets. It would be a strong indicator then in the next 10-12 years it will be 90%.

We are about to witness a major shift and transfer of wealth. Which side will you be on?

Online Advertising with FreeKii.com served over 40 million ads in 2008.

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The decline appears to be hitting the paid search market unevenly with Microsoft and Yahoo getting hammered and Google weathering the storm. Some sources show Microsoft and Yahoo to have lost 20% of their advertisers in recent months: http://adquants.com/Insights-MicrosoftSe archAdvertising.php

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