Worldwide Online Ad Spending Contracts 5% in the Second Quarter, U.S. Loses 7%, According to IDC

Worldwide spending on Internet advertising contracted forthe second consecutive quarter, by 5%, to $13.9 billion from $14.7 billion inthe same quarter a year ago. IDC’sWorldwide and U.S. Internet Ad SpendReport 2Q09(forthcoming) found that all global regions posted losses, withthe exception of the Asia/Pacific region and Japan, which saw slight gains inthe second quarter (2Q09). U.S. spending also declined for the second quarterin a row, by 7% year over year, to $6.2 billion from $6.6 billion.
In the United States, all major advertising formats sawyear-over-year revenue losses, with search ads being least affected, displayads losing 12%, and classifieds shrinking 17%. All major publishers’ ad salesdeclined, for the most part at double-digit loss rates, with Google being theonly exception, posting low single-digit growth. Worst affected wereMonster.com with a 31% decline, suffering from the terrible condition of theclassifieds business in the current downturn, and AOL, hit by both the weaknessin display ads as well as internal sales problems.
For the coming quarters, there is good news and bad news.The bad news first: Given the 2Q09 numbers and the outlook provided by mediacompanies such as Yahoo!, IDC expects U.S. advertisers to decrease their onlinespending quarter over quarter in 3Q09 by about the same amount as they did inthe first and second quarters of 2009. The good news: It seems like things arenot going to get any worse in the Internet ad industry.
“We think the industry will continue to see losses inthe third and fourth quarters, but the growth rates – or the loss rates, if youwill – will eventually begin to improve. However, we also believe the industrymay have to wait until mid-2010 until it sees real growth again,” saidKarsten Weide, program director, Digital Media and Entertainment at IDC.
IDC’s report,Worldwide and U.S. Internet Ad Spend Report2Q09(forthcoming), models worldwide and regional ad spending trends, andmonitors the U.S. market in detail. The study reports the total volume andgrowth rate of the worldwide, regional, and U.S. Internet advertising spendingfor 2Q09. It also reports the top U.S. new media companies’ quarterly domesticad sales, growth rates, and market shares, as well as the spending on major adformats and their growth rates and market shares.

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