The Interactive Advertising Bureau and PricewaterhouseCoopers just released their quarterly report on U.S. online advertising revenues. For the quarter, they estimate online advertising revenues were almost $5.9 billion ($5.865 billion, to be exact), which is an 11 percent increase from the same quarter a year ago and a 2 percent increase from the second quarter of 2008.
If you look at the graph above, you can see that online advertising revenues have been pretty much flat all year long. And the annual growth rate is less than half of what it was a year ago when it was 25.6 percent. To get a sense of the slowdown, look at the annual growth rates for each of the past five quarters:
3Q07: 25.8%
4Q07: 24.3%
1Q08: 17.7%
2Q08: 12.8%
3Q08: 11.4%
And remember, these numbers are just or the U.S. The global online advertising picture might be worse. Just tallying up the worldwide online advertising revenues of Google, Yahoo, Microsoft, and AOL—as I did a few days ago—suggests that annual growth in the third quarter was higher at 18 percent, but the sequential growth was slowing down faster (see chart below) at only 0.6 percent over the second quarter of 2008.
If these trends continue, the fourth quarter could see an actual decline in both U.S. and global growth.
it would be interesting to find out if these stats include figures from the 400+ vertical ad networks out there. It would also be interesting to look at stats comparing the growth of traditional broad range networks (google, yahoo, etc.) vs. vertical networks.
You say “actual decline” like it’s some sort of surprise. It’s not even the first time, and it’s an extremely young industry. With the current economic environment the way it is, all I’m hoping for is a recovery. What’s with TechCrunch trying to fool their readers into thinking that sustained growth should be the norm?
I wonder what percentage of ad spending is by companies who themselves depend on ad revenue for a major portion of their revenue?
Some speculate that the economic slowdown in emerging markets will shift budget allocations from traditional adv to online adv … Not sure if I believe that though …
http://www.star...ne-advertising/
how about advertising in student emails – think i saw a company emailwrap wrapmail – something with wrap that does this and shares revenue with the colleges
It would be interesting to see if the the Ms went up more while the Cs went down (which I suspect). I noticed that Federated Media has holiday rates on shopping sites which is usually the opposite of the pricing strategy for retail in holiday season, unless its remnant inventory.
Display and contextual/search enjoyed a boom when there was too much demand for online ad inventory and supply had a tough time keeping up.
Now, it seems the flat growth is a balance between still-growing contextual/search (because it’s measurable and performance-based) while display is tanking, badly.
I’ve been covering this for quite a while in our blog (blog.yieldbuild.com), and am glad Erick’s been following it here on TC.
Just got done reading this report… Interesting #s and of course there will be a decline in Q4 and the next few as well. Overseas they are hurting as well.
Mike
http://www.wannadevelop.com/