Internet advertising in the US may no longer be growing, as it still is in the UK, but the current downturn looks like being a short one, and some categories are still doing well.
The latest quarterly internet advertising figures from the IAB and PwC show a 5.4 per cent year-over-year decline in the second quarter, very similar to the 5.2 per cent of the first three months. After six years of uninterrupted growth that saw the market expand nearly four-fold, this setback bears no comparison at all to the much bigger slump that accompanied the dotcom collapse.
The contraction in the first half of this year was also much less pronounced than the 15.4 per cent decline seen in overall US advertising, according to the IAB.
Looking for a surer return during the downturn, advertisers continued to move into the types of online advertising that have the most measurable results. Search actually grew in the first half, by 2 per cent, and now accounts for 47 per cent of the total market (interestingly, still well short of the 60 per cent share it has reached in the UK.) Types of advertising where pricing is linked to some type of performance increased to 58 per cent, up from 54 per cent in the first half of 2008.
The nascent digital video business also continued to turn up, though it still only accounts for 4.3 per cent of all online ads. The news for sites that rely on classifieds was less encouraging: this type of advertising dropped 31 per cent, to $1.1bn, as listings flowed to free services like Craigslist.
All in all, the figures look moderately encouraging – as long as the fourth quarter brings its usual seasonal bounce. If advertisers fear that consumers will hold back during the holiday season and cut their budgets accordingly, what has so far been a shallow downturn could turn into something much uglier.
