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Internet Ad Market A Bull or Bear?

Depends on whom you ask

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Seems like it all just depends on how one spins it sometimes. The IAB and PricewaterhouseCoopers tout a bull market for online advertising in the first half of 2008. The Associated Press, though, describes a second quarter decline as the beginning of the end.

Of course economic pessimism is sort of en vogue these days.

IAB’s version goes this way:

Internet advertising revenues (U.S.) for the first six months of 2008 were $11.5 billion, setting yet another new half-year record that represents a 15.2 percent increase over the first half of 2007. The second quarter of ’08 was up 12.8% over the same period of 2007 and showed a slight decline of 0.3% from the first quarter.

 

Search and Display-related advertising continue to set records. Search revenues totaled almost $5.1 billion for the first six months of 2008, up 24 percent from the $4.1 billion for the same period in 2007. Display-related advertising totaled close to $3.8 billion for first six months of 2008, compared to the $3.2 billion reported for the same period in 2007, showing about a 19% increase.

That all sounds pretty good, and considering sentiment that online advertising is thought to be immune from larger branding expense cutbacks during uncertain economic times, things seem set to only get better. And Christmas is just around the corner right?

The AP isn’t so optimistic and that pessimism seems right at home after a weak back-to-school season and what everyone is sure are hard times ahead. The AP characterized the same IAB report as sign of what’s to come: ad sales dipped in Q2 compared to Q1.

That revenue "dipped slightly" is not a seasonal effect, according to AP writer Rachel Metz, but instead "a ripple effect from the bad economy." The previous seven quarters showed increases.

"When you look at the economic environment, I think one would conclude this is certainly quite reasonable and not unexpected," said David Silverman, a partner at PricewaterhouseCoopers—yes, the same PricewaterhouseCoopers in the beginning of this article.

Well, guess we should get used to complete turnarounds, huh? On the bright side, Christmas this year might actually go back to being about family and goodwill towards men—we’ll have little else, won’t we?
 

Internet Ad Market A Bull or Bear?
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  • http://www.fourthfloormarketing.com James Spinosa

    Frankly I have been watching AdSense CPC’s decrease, competitive search terms become less competitive, etc.  I don’t feel that the advertising is increasing, I feel like most thing in our current economic state is on the downturn at least at the moment.

    -James