Internet Ad Sales Are Up, But At Slower Pace
Posted by dave at 3:39 pm
Internet marketing in the U.S. has significantly increased last year, based on a recent report. However, this was also noted to be the lowest increase since the last four years. The Interactive Advertising Bureau released on March 2009, its last year’s compiled report on Internet Advertising Revenue which stated that internet advertising has showed positive growth in 2008. But experts say this may be going flat in the next years.
David Silverman, a partner at PricewaterhouseCoopers who was also part of the team compiling the report, said that the economic downturn of the country heavily affected the steady growth of the internet marketing industry.
Available data of the report showed that internet marketing reached to $23.4 billion last year which noted a 10.6% increase compared to figures in 2007.
“It’s one of the few things that actually grew in the fourth quarter of 2008,” said Mr. Silverman.
He added that this was actually the only advertising spending category with positive growth other than cable television (TV).
Nielsen, the leading ratings company reported that advertising on cable TV grew by almost eight percent last year.
The ratings firm on the other hand, reported that all non-Internet media decreased by more than two percent in 2008. Although this was not very alarming, the company found that network television spending decreased by 3.5 percent. Print media also showed its downfall like national magazines decreased by 7.6 percent and even local newspapers decreased by 7.8 percent.
While online advertising compared to other media did show positive growth last year, its growth was actually the slowest in a four-year period. For 2008, the first two quarters showed that internet revenue went down in a matter of four years. The flunk was noted to be the first.
The growth rate of internet marketing in 2008 was also at its lowest which accounted to more than two percent growth rate than the growth rate during the fourth quarter of the same year.
In online advertising, trends begin to show with digital revenue. Digital revenue increased to more than 50% since revenue for last year totalled to $734 million while in the previous year, it only totalled to $324 million..
Advertisers are also trying something new these days like using performance based ads. These are ads that allow advertisers to pay only when a given ad is clicked or a certain product is bought which is linked to an ad.
For last year, performance based ads made up to more than half of the total share for online advertising. The rate went up to 57% compared to 51% in 2007.
Meanwhile, CPM based ads or ads that charge according to how often they are shown, decreased in usage from 45% to 39% last year.
Sponsorship advertising on the other hand had a minimal fall of one percent last year from its usage rate of three percent in the previous year. In sponsorship advertising, publishers create custom pages and ads for brands also.
Another interesting section to note on online advertising revenue is on advertising of consumer based goods. From $925 million in 2007, revenue went up to $1.5 billion last year.
Peter S. Fader, a Marketing professional from the Wharton School of the University of Pennsylvania, sees this as being highly significant. He said that this is something that would have been unthinkable even just a few years ago.