Don’t Write Online Advertising’s Obituary Just Yet

Third Quarter's $5.9 billion 2nd-highest Ever.

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Despite the prophecies of some online media moguls, online advertising isn’t looking that bad off. The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP announced today that Internet advertising revenues have reached nearly $5.9 billion for the third quarter of 2008. That’s up 11% from the previous year. According to the IAB:

While double-digit annual growth continues, the quarter-to-quarter curve remains relatively flat compared to recent past performance. The Q3 2008 figures, published in the IAB Internet Advertising Revenue Report, are 2 percent higher than the Q2 2008 results. Set against strong economic headwinds in the U.S. economy, Q3 ’08’s $5.9 billion represents nonetheless the second-highest quarter results ever. For the first nine months of 2008, revenues totaled $17.3 billion, up from $15.2 billion in the same period a year ago and surpassing the record set in the first nine months of 2007 by nearly 14 percent.

Source: PwC/IAB Internet Advertising Revenue Report (www.iab.net)

Just a reminder about what the IAB actually is – It’s comprised of more than 375 leading media and technology companies who are responsible for selling 86% of online advertising in the United States.

The information presented by the IAB and PricewaterhouseCoopers doesn’t spell doom to me. In fact, some of us have been quite skeptical of all of the doomspeak related to online advertising (which I should point out is certainly not limited to the above example). I’ve discussed this before, citing an interesting article by Svetlana Gladkova at Profy, which took a look at advertising during the great depression.

We’re obviously in some rocky economic times, but online advertising is not going to be among the areas that are hit the hardest. "A weakening economy will continue to be a challenge to all forms of advertising-supported media," says David Silverman, a partner at PricewaterhouseCoopers. "However, the Internet should be better poised to withstand the storm given its ability to combine performance-based advertising along with broad-based branding." (emphasis added)

Know one knows for certain what the future holds for online advertising.  All anybody can do at this point is make predictions and speculate based on previous data. Based on my discussions with the WebProNews ad sales team the predicted Internet Ad-Doomsday is not on the horizon yet. By the sounds of it, the companies that account for 86% of online advertising in the U.S. don’t see it coming yet either.

Don’t Write Online Advertising’s Obituary Just Yet
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  • http://www.vand.mobi Guest

    i wonder

  • http://www.seochester.co.uk/internet-marketing-business.html Online Advertising Chester

    Online advertising is probably one of the most sustainable areas to work in at the present time. So many people moan to me about how business is hard right now, yet I’m just taking on new client after new client!

    • Chris Crum

      Always good to here good testimonials like this for the industry.

  • http://cozumelrentalvillas.com Bob Rodriguez

    Flat rate advertizing with a keen eye tward conversion rates and ROI is one thing. But PPC and click fraud (which is completely out of hand in my market) is another matter all together.

    I have found from experience that click fraud is pervasive and that generic search and good SEO on key word phrases is the only way to go if you want sustainable growth in your business (not to be confused with sustainable growth in the ad business)! :0)

  • Johnny

    Yes, ad totals are higher……it’s just that those ad expenditures are spread out among more and more web properties, whether it be developed sites or parked sites, email campaings, etc…….

    So really, most folks in the publishing/ad monetization business are seeing lower ad revenues.  Just read all the forums, not just SEO and web development forums, but the others too and you will see how many folks have seen huge declines in revenue.

    Of course Google and the like will still get theirs since they are the conduit in which majority of ads flow through.

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