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December 1, 2008 9:51 AM PST

eMarketer lops $1.3B off 2008 online ad estimate

by Stephen Shankland

Analyst firm eMarketer has reduced its estimate for online ad spending in 2008 to $23.6 billion from its August estimate of $24.9 billion, with this year's online ad growth rate of 11.3 percent dropping to 8.9 percent in 2009.

Looking on the bright side, eMarketer said in a statement, "It is important to note that the lowered estimate still represents an increase of 11.3 percent over 2007 spending." And eMarketer expects spending to reach $25.7 billion in 2009, $28.5 billion in 2010, and ultimately $42 billion in 2013.

But the rough news still jumps out. Hardest hit is spending on display ads, the graphical variety that typically are used to promote brands, for which the growth rate estimate was cut from 16.9 percent to 3.9 percent. "Display is suffering because many of the vertical industries--such as auto and retail--that are key players for the format are slashing their ad budgets," eMarketer said.

The other major variety, textual ads placed next to search results, is expected to grow at 21.4 percent in 2008, its lowest level so far. Next year the search-ad growth rate should be at 14.9 percent, the company predicted, dropping to 10.4 percent in 2013.

The search-ad growth rate is still larger than the overall market, though.

Stephen Shankland writes about a wide range of technology and products, but has a particular focus on browsers and digital photography. He joined CNET News in 1998 and since then also has covered Google, Yahoo, servers, supercomputing, Linux and open-source software, and science. E-mail Stephen, or follow him on Twitter at http://www.twitter.com/stshank.
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Add a Comment (Log in or register)
by Jim Hubbard December 1, 2008 12:14 PM PST
Stay tuned people....within a week CNET will post a story saying how great advertising is expected to be in 209-2011.

Their coverage of this arena is laughable.
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by Rolv December 2, 2008 2:49 AM PST
Companies seem to ignore the single largest online branding/advertising venue available: their own regular external emails. Why not use these emails to market the senders company?

You have a website.
You send emails.

Why not multiply your sales-staff by ?wrapping? the regular email in an interactive letterhead?

No other marketing or advertising medium is as targeted as an email between people that know each other (as opposed to mass emails). These emails are always read and typically kept.
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