Monday, April 06, 2009

INTERNET ADS SAY GOODBYE TO GLORY DAYS

Paris, April 6, 2009
Financial Chronicle

Growth in online advertising largely ground to a halt in the final months of last year in major markets like the United States and Britain, according to several reports published last week. And forecasters say it may have gone into reverse since then, as the economic downturn has deepened and marketers have continued to pare their budgets.

In the United States, online ad spending eked out only a tiny gain in the fourth quarter, rising to $6.1 billion from $6 billion a year earlier, according to the Interactive Advertising Bureau.

In Britain, which is seen as a bellwether because nearly a fifth of ad spending there occurs online, Internet advertising actually fell slightly in the second half of the year, according to the British Internet Advertising Bureau.

Aside from a slow quarter here and there, Internet advertising previously had not declined outright since the dotcom bust, when the business was in its infancy.

O.K., the current slowdown hardly constitutes a bust, at least not yet. And the outlook for the Web still isn’t as dire as it is for traditional media.

GroupM, the media buying division of the advertising company WPP Group, said last week that it expected ad spending on the Internet to rise by 6.7 percent globally this year. That compares with an expected 4.4 percent plunge in overall ad spending.

But a lot of the growth on the Internet is expected to occur in relatively underdeveloped markets, which are playing catch-up with more digitally advanced countries like Britain. There, said Adam Smith, the London-based futures director at GroupM, online ad spending is likely to be flat, at best, this year.

And he sees no return to the spending increases of 30 percent or more that were the norm a few years back.

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