Internet ad spend declines by 3.4 percent in 2009 compared to prior year. But strong fourth quarter softens the blow.
Online ad spending was down 3.4 percent last year compared to 2008 but saw a significant bounce in the fourth quarter, the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers reported today. Q4 spending in 2009 was up 14 percent compared to the third quarter, but increased 2.6 percent when compared to Q4 2008.
Ad spend for Q4 2009 totaled $6.3 billion and seemingly has provided a ray of hope among industry players. "Apocalypse... not now," quipped Sherrill Mane, SVP of industry services for the New York-based IAB.
Indeed, the mood was cautiously upbeat during the IAB's conference call as advertisers keep their fingers crossed that the 2008 recession is beginning to fade. What's more, the report's categorical break-downs provide a glimpse into which specific channels get the hatchet first when budgets tighten.
Classifieds got hit the hardest during 2009 as online advertisers spent $2.3 billion, a 29 percent year-over-year decline, according to the survey-based "IAB Internet Advertising Revenue Report" that was conducted by PricewaterhouseCoopers. During Q4, classified ad spending totaled $594 million, a drop of 23 percent compared to the same period in 2008.
"That decrease was largely driven by the overall economy and its impact on jobs, real estate, and autos - three categories that classifieds relies upon," said David Silverman, partner for the New York-based PricewaterhouseCoopers.
During Q4 2009 - compared to the same period in 2008 - the ad spend in the following categories recorded these changes: e-mail (-11 percent), lead-generation/referrals (-14 percent), and brand sponsorships (-1 percent). For the full year, the ad spend on rich media dipped by 9 percent while digital video promos saw a lift of 39 percent. The video category jumped from $734 million to more than $1 billion from year to year.
Spending for the Internet's leading ad channel, search marketing, totaled $10.7 billion for the year, accounting for 47 percent of all online ad spending. That total represented a 1 percent increase over 2008. For Q4, spending on search marketing was $2.9 billion, up 4 percent compared to the same period in 2008. The second biggest channel, display ads, saw a lift of 15 percent while accounting for 35 percent ($2.3 billion) of the industry's revenue totals.
Terence Kawaja, managing director for the investment banking firm GCA Savvian Advisors, said the report offered signs of optimism for those in the advertising business, adding that his U.S. clients had strong fourth quarters. Still, he cautioned against the idea of reading too much into Q4's results because it's being compared to the dire quarters that preceded it.
"Year-on-year comparisons to time periods of Armageddon should show substantial growth," Kawaja said. "But [clients] are seeing it continue into Q1 and already into Q2... There was really no visibility this time last year when everyone was kind of a deer in the headlights trying to figure out if the world was coming to an end."
You can follow Christopher Heine on Twitter at @ChrisClickZ.
On the heels of a fantastic event in New York City, ClickZ Live is taking the fun and learning to Toronto, June 23-25. With over 15 years' experience delivering industry-leading events, ClickZ Live offers an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!
Want to learn more? Join us at ClickZ Live San Francisco, Aug 10-12!
Educating marketers for over 15 years, ClickZ Live brings together industry thought leaders from the largest brands and agencies to deliver the most advanced, educational digital marketing agenda. Register today and save $500!
Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.
Hong Kong, May 5-6, 2015
Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.
Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.
May 6, 2015
12:00pm ET/9:00am PT