Online ad spending dropped over 5 percent during the first half of the year, according to a new report from the Interactive Advertising Bureau and PricewaterhouseCoopers. Interactive ad revenues came in at $10.9 billion in the first six months of 2009. Search ad spending still dominates, gaining share along with display and video.
The report is considered a significant measure of online ad spending because it encompasses several interactive ad formats including search, display, video, and classifieds. "If you sell something online, we included it in our survey," said PWC Partner David Silverman.
Interactive ad spending dropped 5.3 percent or $610 million during the first half of '09, compared to the first half of 2008 when spending reached $11.5 billion. The IAB called the decrease "relatively small" compared to recently reported double digit declines in ad spending across all media. Since 1996 when PWC began tracking interactive ad spending for the IAB, revenues have grown at a compound annual rate of approximately 25 percent per year, said Silverman.
Search ad revenue share rose from 44 percent last year to 47 percent this year, up from $5 billion to $5.15 billion. Expenditures on all forms of display ads measured dropped from around $3.8 billion to around $3.76 billion, though it actually gained one percent of share among all formats tracked. Within the display category, banners, rich media, and sponsorship revenues fell. Digital video, however, rose from $345 million to $477 million in the first half of this year.
Earlier this month, Nielsen Online reported that online display ad spending dropped 1 percent in the first half of this year compared to the first half of 2008. TNS, on the other hand, recently reported that online display spending rose 6.5 percent in the first six months of '09 compared to the same period last year.
Another indicator of the evolution of online ad sales models, the share spent on CPM-based ads dropped from 42 percent or $4.75 billion in H1 2008 to 38 percent or $4.06 billion in the same period this year. Meanwhile, the performance-based ad spending share went up from 54 percent or $6.26 billion to 58 percent or $6.36 billion. Hybrid buys accounted for 4 percent of pricing models.
The report also looked at spending on classifieds, lead generation, and e-mail. Classifieds revenues fell from $1.6 billion to $1.1 billion. Lead gen and referrals related spending dropped from $806 million to $728 million. E-mail also fell from $230 million, or 2 percent of revenues, to $149 million or 1 percent of overall interactive ad spending.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.