Study: Display ad growth dips in the first quarter

The growth of Internet display advertising slowed in the first quarter of 2008 because of a weakened economy, according to a study released Wednesday.

Sales of Internet display ads rose 8.5 percent to an estimated $2.9 billion in the first three months of 2008, according to research firm TNS Media Intelligence. In contrast, sales of Web ads were $2.7 billion in the first quarter of 2007, up 16.7 percent from the comparable period of the previous year.

(TNS Media only estimates sales of display ads, excluding other forms of marketing such as paid search ads or sponsorships.)

Despite the slowing growth, Web ad sales are holding their own against the overall ad market expenditures and other traditional media such as cable TV (up 4.1 percent) and outdoor advertising (up 2.5 percent). Newspaper advertising sales were down 5.2 percent year over year. Overall, in the first quarter, total advertising sales rose only 0.6 percent over the estimated $35 billion in ad sales in the first quarter of 2007.

The news could foreshadow more bad news for the year, too. Jon Swallen, senior vice president of research at TNS media intelligence, said early figures from the second quarter show little improvement in the core ad economy.