U.S. Online Ad Revenues Rise In First Quarter

    June 9, 2008

Revenue from U.S. online advertising increased by 23.9 percent to $7.1 billion in the first quarter compared to $5.7 billion in the first quarter of last year, according to IDC.

Despite the sluggish economy, IDC expects Internet advertising to continue to expand rapidly during 2008, even though advertising across all media will most likely be cut back as advertisers look to save money and find more effective marketing channels.

Google continued to extend its leadership position in the U.S. online advertising market in the first quarter. Its domestic net revenue continued to grow faster year over year than most other companies, even as its growth rate continued to decline as the company’s major market, search advertising, continues to mature.

Google’s estimated net U.S. advertising market share was up 24.8 percent in the first quarter of 2008, up from 23.1 percent in the first quarter of 2007.

"What happens is that the current economic crisis puts pressure on advertisers to save money and find more effective marketing channels," said Karsten Weide, program director, Digital Marketplace and New Media at IDC. "Effectively, the crisis accelerates the shift of advertising budgets from traditional media into new media."

IDC says that the threat of a potential recession will decrease expenditure across all media by as much as 7 percent in 2008. The firm believes that online advertising growth will still increase at rates around 15 – 20 percent IDC predicts Internet advertising will more than double in five years.