Spending on Internet advertising declined in the United States and worldwide for the second quarter of 2009, and a recovery may still be a ways off.
U.S. spending dropped 7 percent, to $6.2 billion from $6.6 billion, and worldwide spending was off 5 percent, to $13.9 billion from $14.7 billion, compared with the year-ago quarter, according to data released Wednesday by market analyst IDC.
It was the second decline in as many quarters. For the first three months of 2009, Internet advertising revenue in the U.S. was $5.5 billion, down a notable 5 percent from the $6.1 billion for the fourth quarter of 2008.
The classified advertising format saw the greatest decline, tumbling 17 percent in the second quarter, while display advertising was the least affected by the slump, losing 12 percent, IDC said.
Most ad publishers posted double-digit losses in the second quarter, with Monster.com recording the greatest decline, at 31 percent. Google was the only publisher to record growth in the second period, posting low single-digit growth.
IDC said that based on guidance provided by online-ad publishers, it expects U.S. advertisers to decrease their online-ad spending in the third quarter but that the Internet advertising climate is not expected to get any worse.
"We think the industry will continue to see losses in the third and fourth quarters, but the growth rates--or the loss rates, if you will--will eventually begin to improve," Karsten Weide, program director for digital media and entertainment at IDC, said in a statement. "However, we also believe the industry may have to wait until mid-2010 until it sees real growth again."
(Credit:
Hitwise)
Reflecting consumer pessimism toward the current economic climate, online retailers experienced a decline in visits for the eighth straight week, according to a report released Tuesday.
Traffic to a custom collection of 500 retail Web sites monitored by analyst Hitwise declined 3 percent for the week ending October 25 compared with the same week a year ago.
The declines mirror the overall decline in consumer spending the past couple of months. Visits to Hitwise's Retail 500 Index were up 14 percent from June through August compared with the same period in 2007, but then declined 4 percent in September.
"These declines have strong implications for the upcoming online holiday season as well as offline sales," Heather Dougherty, research director at Hitwise, said in a statement. "Everyone is aware of the role that the Internet plays to influence offline sales through research, so this slowdown may indicate a further ripple effect in sales in retail locations."
Online music retailers saw the greatest year-over-year traffic decline for the week of October 25, dropping 21 percent. Computers saw the second greatest decline at 18 percent, followed by ticketing at 12 percent. Toys and hobbies saw a decline of 10 percent, as did video and games, according to Hitwise.
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