Internet advertising, beyond the glory days

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explosion.jpgADOTAS — The latest news that online advertising has slowed might not be a hiccup but a long term condition.

In Britain, which is seen as a bellwether because nearly a fifth of ad spending there occurs online, Internet advertising actually fell slightly in the second half of the year, according to the British Internet Advertising Bureau. The Interactive Advertising Bureau release of its online advertising spending numbers for 2008 showed that the Internet was swallowed up in the economy maelstrom.

Advertising growth was cut in half last year. US online advertising grew only 11 percent in 2008 to $23.4 billion, the slowest rate since 2002. And despite some positive predictions elsewhere, research firm eMarketer revised its projections, saying that the rate of US online ad spending growth will halve again in 2009, falling to 4.5 percent.

And while some say this is a respite, Adam Smith, the London-based futures director at GroupM, told the Times that this was a course correction. And he sees no return to the spending increases of 30 percent or more.

“When we emerge from this crisis, we will not have anything like the growth rates we had been seeing,” he said. “I wouldn’t be surprised if it becomes just an average performer.”

Part of the problem is the effectiveness of online advertising as well as the options. If media buyers can’t get a good deal in one space, they’ll go to another. This has forced prices down. This pressure doesn’t seem like it will abate any time soon.

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