The Internet was one of only five advertising mediums to see revenue growth during the harsh year of 2008, according to TNS Media Intelligence. Compared to prior years, the growth was skimpy. The researchers said Internet ad spend grew 4.6 percent over 2007, “the weakest full-year results for the medium since the dot-com bust of 2002.” To put that in perspective, consider that Internet spending in 2007 increased 18.9 percent over 2006, according to a prior report.
However, compared to many other mediums — and considering the fact that total advertising expenditure declined 4.1 percent, to $141.7 billion from 2007 — even meager growth is a reason for celebration. “Everybody else would kill for that number,” said TNS Media Intelligence Senior VP of Research Jon Swallen. In fact, only syndication television, with 6.5 percent growth, and Spanish language magazines, with 4.9 percent growth, fared better than the Internet, says the report.
Overall ad spending during the fourth quarter of last year took a nosedive when compared to Q4 of 2007, dropping 9.2 percent. However, Internet ad spending for the quarter reflected a decent 7 percent increase over the same quarter of 2007. TNS Media Intelligence measures only Internet display advertising.
Swallen said preliminary figures for the first quarter of 2009 show that Internet ad spending is likely to be less than it was during the first quarter of 2008. “Display advertising in the first quarter is quite soft,” he said. “If we tally the numbers, we see it suffering a loss compared to a year ago. During the first quarter of this year, the entire ad economy just ground to a halt and many media are experiencing double-digit losses. The Internet may not quite hit that depth of despair.”
To nobody’s surprise, newspaper advertising was the medium hardest hit in 2008. The report says newspaper advertising dropped 11.8 percent year-to-year and 16.5 percent fourth-quarter to fourth-quarter. Radio didn’t fare much better, seeing a 10.3 percent decline yearly and 14.8 percent drop in Q4 of 2008 compared to Q4 of 2007, says the report.
According to the report, Procter & Gamble was the largest overall advertiser, spending about $3 billion, a 7 percent decrease from 2007. Verizon Communications remained in second place by spending about $2.4 billion, a gain of 4.3 percent.
Swallen said financial services companies remained the biggest Internet ad spenders last year, with expenditures from that industry up 23 percent over 2007. “Even with all the stuff going on at the end of the year with the financial crisis, within the financial services industry, Internet spending held up better than any of the offline media,” he said.
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