Internet Ad Revenue Down 5.3 Percent

By October 05, 2009

Internet advertising, which totaled $10.9 billion in revenue for the first half of 2009, fell 5.3 percent year-over-year, according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC). Almost half of this revenue came from search. Search advertising accounted for $5.1 billion in the first half of 2009, which was 47 percent of the first half's total advertising revenue of $10.9 billion. The leading category of online advertising was search, followed by display banners and classifieds.

While classifieds accounted for a healthy 10 percent of all internet ad revenue, it has fallen 4 percent in the last year, from $1.6 billion to $1.1 billion. Email ad revenue was cut to half of its already small amount; it now accounts for 1 percent of total online ad revenue, falling $81 million to $149 million.

Rich media revenue was the biggest drop outside of classifieds, generating $102 million less in revenue year-over-year.

These three losses account for a healthy chunk of this year’s decline. Only two categories saw even the slightest growth this year, search and digital video, though the latter’s total of $477 million represents only a modest 4 percent of total first half revenue.

Q2’s total internet advertising revenue marked a 0.7 percent decline from the previous quarter.

No mater how bad, internet advertising has fared better than more traditional forms, the absence of which has caused entire media industries to crumble.

“Interactive is one of the advertising sectors that has been least affected,” said Randall Rothenberg, President and CEO of the IAB.

“In recent years the digital revolution has driven a transformation of how consumers experience advertising and media,” Rothenberg said. “As the economy improves, we’re confident that brands will devote an even greater share of their budgets to reaching consumers as they make interactive media a larger part of their lives.”

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