Ad Spending Down, Still Better Online

By December 11, 2009

For the first time since 2002, US online advertising is set to drop this year, this time by 4.6 percent. David Hellerman, senior analyst at eMarketer and "US Ad Spending" report author says, "The economic cycle has reached bottom - at least for the online ad industry. In the first three quarters of 2009, spending fell 5.3 percent, but estimates show a smaller loss during the fourth quarter of 2.5 percent. After this year, projections show growth for 2010 to 2014. The recession has been shown to affect different components of online advertising in different ways. As shown in the report, "paid search will grow by 2.2% in 2009, while classified ad spending will decline by 30.2%." These same trends continue through 2010 and 2011.

The biggest growth shown is in the video ad spending category, far outperforming the others. Between 2009 and 2014, growth performance will be between 34 and 45 percent. For this reason, the report predicts video ads becoming the main form of brand advertising in the digital space.

Total media advertising performed worse all around compared to online categories. In 2008, growth was down over six percent, and in 2009 slumped even worse at nearly fifteen percent. While next year spending projections are only -0.5 percent, increases should begin the following year. From 2011 to 2014, growth is expected between 0.3 and 2.7 percent.

According to Hallerman, the recession has made the trends of ad-supported media more transparent by further polarizing the performances between categories. “The blend of economic, societal and technological trends is not over, although total media spending will rise again starting in 2011.”

At 11.5 percent for the first three quarters of 2009, Nielsen figures show a total decrease of $10.9 billion in ad spending, with the lowest decline in print media, as shown in today's StrategyEye .

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