IDC Predicts Contraction In Online Ad Spending

First since dot-com crash

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Going into the recession, expert after expert said it: online advertising was supposed to represent a safe haven of sorts, an area into which money would pour regardless of whatever else was happening in the world.  Unfortunately, a new report from IDC suggests that’s no longer the case, as a year-over-year decrease in revenue seems about to occur.

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The report, which recommends people brace themselves, states, "The U.S. Internet advertising industry will most likely experience the first actual contraction in ad spending in the current quarter ever since the dot com bubble burst in 2001."  And a contraction of five percent might occur, rather than something insignificant (think 0.01 percent) that would just meet the technical definition.

Want more bad news?  Apparently the second quarter’s not looking so hot, either.  IDC believes conditions may get worse by then.

There are silver linings, though.  First, IDC’s report predicts that things will start to get better this fall, so people and companies dependent on online advertising would only need to tough it out for another six or so months.

Second, the search industry is still in decent shape.  Even as IDC saw spending on display and classified ads fall in the fourth quarter, search ads did well, up 10 percent.

IDC Predicts Contraction In Online Ad Spending
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